UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORID A

SHAREN A. KIRKHAM, Individually andOn Behalf of All Others Similarly Situated,

Plaintiff,

V .

GLOBETEL COMMUNICATIONS CORP .,TIMOTHY HUFF and LAWRENCELYNCH,

Defendants .

Plaintiff alleges the following based upon

C.A. No.

CLASS ACTION COMPLAINTFOR VIOLATIONS OF FEDERAL .SEC 'PIES LAWS

JURY TRIAL DEMANDE D

i the investigation of plaintiffs counsel, which

included a review of United States Securities and Exchange Commission ("SEC") filings b y

GlobeTel Communications Corp . ("GlobeTel" or the "Company "), press releases issued by the

Company, and media reports about the Company . Plaintiff believes that substantial additional

evidentiary support will exist for the allegations set forth herein after a reasonable opportunit y

for discovery .

SUMMARY OF ACTION

1 . This is a securities class action on behalf of plaintiff and all other persons or

entities, except for defendants, who purchased or otherwise acquired GlobeTel securities ("th e

"Class") during the period December 30, 2005 through April 11, 2006, inclusive (the "Clas s

Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchang e

Act") .

I

JURISDICTION AND VENUE

2. The claims asserted herein arise under and pursuant to Sections 10(b) an d

20(a) of The Exchange Act, (15 U .S .C . §§ 78j(b) and 78t(a)), and Rule lOb-5 promulgated

thereunder (17 C .F.R. §240.1Ob-5) .

This Court has jurisdiction over the subject matter of this action pursuant to §2 7

of the Exchange Act (15 U.S.C. §78aa) and 28 U.S.C. § 1331 .

4. Venue is proper in this Judicial District pursuant to §27 of the Exchange Act, 1 5

U.S.C. § 78aa and 28 U .S.C. § 1391(b) . Many of the acts and transactions alleged herein occurre d

in substantial part in this Judicial District . Additionally, the Company maintained an executiv e

office in this Judicial District during the Class Period .

In connection with the acts, conduct and other wrongs alleged in this complaint ,

defendants, directly or indirectly, used the means and instrumentalities of interstate commerce ,

including but not limited to, the United States mails, interstate telephone communications and

the facilities of the national securities exchange.

PARTIES

6. Plaintiff Sharen A . Kirkham, as set forth in the accompanying certification ,

incorporated by reference herein, purchased shares of GlobeTel stock at artificially inflate d

prices during the Class Period as described in the attached certification and was damaged

thereby .

7. Defendant GlobeTel provides an integrated suite of telecommunications product s

and services, utilizing Stored Value, Voice over Internet Protocol, and wireless access

technologies . The principal offices of the Company are located at 9050 Pines Boulevard, Suit e

110, Pembroke Pines , FL 33024 .

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Defendant Timothy Huff ("Huff) was a Director and Chief Executive Office r

("CEO") of GlobeTel .

9. Defendant Lawrence Lynch ("Lynch") was Chief Operating Officer ("COO") and

acting Chief Financial Officer ("CFO") of GlobeTel .

10. The individuals named as defendants in ¶¶8-9 are sometimes referred to herein as

the "Individual Defendants ." The Individual Defendants, because of their positions with the

Company, possessed the power and authority to control the contents of GlobeTel's quarterl y

reports, press releases and presentations to securities analysts, money and portfolio managers an d

institutional investors, i .e ., the market. The Individual Defendants were provided with copies of

the Company's reports and press releases alleged herein to be misleading prior to or shortly afte r

their issuance and had the ability and opportunity to prevent their issuance or cause them to be

corrected. Because of their positions and access to material non-public information available t o

them, the Individual Defendants knew that the adverse facts specified herein had not bee n

disclosed to and were being concealed from the public and that the positive representation s

which were being made were then materially false and misleading . The Individual Defendant s

are liable for the false statements pleaded herein, as those statements were each "group-

published" information, the result of the collective actions of the defendants .

SCIENTER

11 . In addition to the above-described involvement, each Individual Defendant had

knowledge of GlobeTel's problems . Each was motivated to conceal such problems. Defendants

Huff and Lynch, having served as CEO and CFO, respectively, provided for financial reportin g

and communications with the market . Communications with the market, including conferenc e

calls, as well as internal reports showing GlobeTel's forecasted and actual growth were prepare d

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under the Individual Defendants' direction .

12. Each Individual Defendant sought to demonstrate that he could lead the Compan y

successfully and generate the growth expected by the market . Each Individual Defendant als o

owed a duty to the Company and its shareholders not to trade on inside information .

FRAUDULENT SCHEME AND COURSE OF BUSINESS

13. Each defendant is liable for (a) making false statements, or (b) failing to disclose

adverse facts known to him about GlobeTel . Defendants' fraudulent scheme and course o f

business that operated as a fraud or deceit on purchasers of GlobeTel publicly traded securitie s

was a success , as it (a) deceived the investing public regarding GlobeTel's prospects and

business; (b) artificially inflated the prices of GlobeTel's publicly traded securities ; and (c)

caused plaintiff and other members of the Class to purchase GlobeTel's publicly traded securitie s

at inflated prices .

SUBSTANTIVE ALLEGATIONS

14. Throughout the Class Period, defendants issued several statements which toute d

the consummation of a $600 million deal with a Moscow-based company named LL C

Internafta, to install wireless networks in Russia's 30 largest cities . The truth, however, was

that no such company existed and that the deal, like many of GlobeTel's other busines s

ventures, was in reality a sham .

15. The Company began as a wholly-owned subsidiary of American Diversifie d

Group , Inc . ("ADGI") which was incorporated under the laws of the State of Nevada as Terr a

West Homes, Inc., changing its name to ADGI in March of 1995 . Prior to the Class Period,

GlobeTel was in the homebuilding business, then the shock absorber business, followed by the

syphilis detection business, and more recently the telecommunications and financial service s

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business. Until 2000, the Company operated out of a 600-square-foot office in Hickory Hill ,

North Carolina . At the beginning of 2000, the Company merged with a Miami-based company

called Global Transmedia Communications Corp. ("Global") and changed its name to GlobeTel

Communications . On May 23, 2005, following a reverse 15 :1 stock split, GlobeTel began

trading on the AMEX .

FALSE AND MISLEADING STATEMENTS AND OMISSIONS

16. On December 30, 2005, the Company announced a "binding agreement "

valued at $600 million in telecommunications and Internet services with Moscow-based LLC

Internafta ("Internafta") in a press release titled, "GlobeTel Wireless to Install $600 Million

WiMax Wireless Network in 30 Largest Russian Cities ." The press release stated in part :

FORT LAUDERDALE, Fla.--(BUSINESS WIRE)-- Dec . 30, 2005GlobeTel Communications Corp. (AMEX:GTE) today announced that itsGlobeTel Wireless subsidiary has entered into a binding agreement to installwireless communications networks in 30 cities throughout the Russian Federation,providing broadband, VOIP and DECt technologies .

GlobeTel Wireless has entered into an agreement with LLC Internafta("Internafta") of Moscow, Russia, whereby Internafta will pay to GlobeTelWireless a series of four construction payments totaling US $600 million for theinstallation of an array of proprietary networks to be installed in Russia's 30largest cities, starting with Moscow and St . Petersburg . GlobeTel Wireless willboth manage the completed network and will retain an ongoing 50%shareholding in the operations of the network, allowing the Company to enjoy thesignificant benefits of the recurring revenue stream . GlobeTel plans to roll out thenetwork in 3 stages, comprising 10 cities each, over the next 27 months .

Over the past six months, GlobeTel has had a number of key meetings withofficials at various levels of the Russian Government, including senior membersof the Russian Parliament (the "Duma") and various branches of the Russiantelecommunications and technology establishment . In early October, followingmonths of preliminary discussions, GlobeTel CEO Timothy Huff - along withGlobeTel Wireless President, Uli Altvater and Sanswire President Bob Jones -demonstrated a working version of the HotZone 4010 equipment that will formthe backbone of the new 30-city network . At that demonstration, the HotZone4010 system successfully provided internet and DECT phone connectivity insidethe Duma Building, quickly establishing its capabilities and ease of use . Largely

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upon the strength of that presentation, GlobeTel immediately entered insubstantive negotiations with a group of prominent Russian investors for theimplementation of the network which has resulted in today's agreement .

"It is beyond exciting to be able to bring this level of connectivity to Russia,"said GlobeTel CEO Tim Huff. "Russia will, quickly and at a relatively modestcost, have a wireless infrastructure that will rival any in the industrialized world .This presents an amazing opportunity for us, for Russia and for our Russianpartners . The Russian Internet market is severely limited by a lack ofinfrastructure and by the high cost to individual users of obtaining high speedinternet access, even in those relatively rare cases where it is available . TheGlobeTel Wireless network will provide city-wide high speed, wirelessconnectivity with the ability to provide voice-over IP telephony along withresidential and business-based DECt service . DECt technology, particularly inconjunction with low-cost VoIP service, is the key to delivering highly affordablewireless telephone and broadband access to areas with limited or high costservice . "

"Completely apart from the obvious economic rewards associated with aninvestment in this exciting new communications technology, we are most proudof the social, educational and community benefits tha twe are able to facilitate as part of the dramatic quality-of-life attributes which arerapidly emerging throughout the Russian Federation," stated Maxim Chernizov,one of the Founding Principals of Internafta . "This initial step with GlobeTel -along with other very significant technology breakthroughs to follow - will proveto be significant for all of us in the relatively near-term," he continued .

Uli Altvater, President of GlobeTel Wireless stated : "This is a very largeundertaking that will utilize the skills or more th an 1 ,000 people in Russia,Europe and the United States . This transaction will catapult GlobeTel to aposition as one of the top two suppliers and operators of wireless networks in th eworld . "

17. On news of this announcement, GlobeTel stock surged from $2 .19 to $3 .68 per

share, an increase of $1 .49 or more than 75%, on extremely heavy trading volume.

18. On January 9, 2006, defendants provided additional details of the Russian deal ,

including the planned operation of the installed networks by their NuTel Wireless ("NuTel" )

joint venture , in a press release entitled , "ADDING and REPLACING GlobeTel Cites Detail s

of Russian Wireless Agreement ." The press release stated in part :

FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Jan. 9, 2006

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Add forward- looking statements after last graph ofrelease .

The corrected release reads :

GLOBETEL CITES DETAILS OF RUSSIAN WIRELESS AGREEMEN T

GlobeTel's (AMEX:GTE) entry into the Russian communications market is theculmination of more than a year of meetings with Russian investors, members ofthe Russian Parliament and leaders of the Russian technology sector. Thesuccessful results of those discussions and final negotiations were released byGlobeTel to its shareholders and to the public on December 30, 2005 . In order tofurther clarify the nature of the transaction, GlobeTel Communications Corp .today has provided below the following additional information about thetransaction . The full contract may be viewed as part of the company's 8-K filingwith the SEC on January 6, 2006 .

Q . Who are the counterpart ies to the Russian agreement?

A. GlobeTel Wireless, GlobeTel's wholly -owned subsidiary , has entered into abinding contract with LLC Intemafta ("Inte rnafta") . Internafta is a p rivate Russianspecial purpose corporation formed by a group of wealthy Russian investors (the"Investors " or "Internafta") for the specific purpose of deploying GlobeTel'sprop rietary wireless communications systems throughout the Russian Federation .

Q. How much is being invested and when will the payments begin ?

A. Internafta will pay to GlobeTel a total of US$600 million in order to acquireand to install GlobeTel's wireless networks in 30 of the Russian Federation'slargest cities . Intemafta will make a series of "progress payments" which are bothtime- and progress-based . The first installment will be paid this month . This firstUS$150 million payment represents a construction deposit that will allowGlobeTel to initiate the assembly of the equipment necessary for the networkinstallation in an initial group of 10 cities . As each of three groups (of 10 citieseach) achieves a 50% completion rate, a US$75 million progress payment will bereleased to GlobeTel . Upon 95% completion of any city group, a remainingUS$75 million payment will be released for that city group . Ultimately, then, aseach of the three city groups achieves, first, a 50% and then a 95% completionrate, six US$75 million progress payments, plus the initial deposit of US$150million, will have been made to GlobeTel Wireless, totaling US$600 million .

Q . How much time will be required for GlobeTel to install the total network ?

A. GlobeTel currently estimates that the entire network will be fully installed overa 27 month period . Although the full network installation is estimated to occurover this period, fee-paying subscribers are expected to be brought onto the

network in phases . After a 60-day "planning and preparation" phase starting onFebruary 1st, the installation is expected to begin on April 1 st .

Q. Who will operate the network ?

A. The network will be operated by NuTel Wireless ("NuTel"), a Russiancompany which will be owned 100% by a European Joint Venture companywhich is being established by GlobeTel and Internafta. Each party will own 50%of the shares of the European JV company which owns NuTel. NuTel Wireless isa newly- incorporated Russian operating company . The Operation ControlCenters responsible for operating, monitoring and maintaining the network will belocated in Russia (Moscow), in Germany and at our Network Operations Centerin Florida .

19. On January 31, 2006 and March 3, 2006, the Company issued press release s

explaining why GlobeTel had not yet received the necessary funding from Inte rnafta .

20. On March 13, 2006, defendants stated that if Internafta did not provide th e

required funds within one week, GlobeTel would exercise the right to cancel the contract, in a

press release entitled , "GlobeTel Communications Updates Status of Joint Venture with LL C

Intemaffta ." The press release stated in part :

FORT LAUDERDALE , Fla .--(BUSINESS WIRE)--March 13, 200 6GlobeTel Communications Corp. (AMEX:GTE) today provided a brief update onthe status of the Russian network negotiations .

CEO Timothy Huff stated, "On March 2, we advised our shareholders thatInternafta requested an additional delay in the closing of the funding until theweek of March 6 . Since then, GlobeTel has provided Internafta and its banks wit ha significantly expanded business plan outlining in detail the company's programfor equipment manufacturing, delivery, installation, testing, monitoring, staffing,progress payment requirements, and other pertinent information . Internaft aadvised us that its funding has been approved by its bank syndicate, subject onlyto the bank's final review and analysis of this GTE business plan .

"Although the contract signed between GlobeTel and Internafta did not specifysuch a financing of Internafta's funding obligation, and while GlobeTel did notanticipate that such a financing by Internafta would emerge as it has, we haveagreed to a continuance of the contract with Internafta until the end of this week,pending a final decision by Internafta's bank regarding a funding commitmentsecured by Internafta's assets .

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"Should such a funding commitment not be forthcoming by the end of thisweek, or unless the banking syndicate provides written assurance sto GlobeTel of the imminent delivery of such commitment, GlobeTel will have nochoice but to exercise its right to default the contract for non-payment . Thisoutcome would be unfortunate given the time and effort that our entire staff hasdedicated to this transaction . However, we're committed to more than twentyother GlobeTel Wireless network projects requiring our time and attention .Further delays in the closing of the Internafta transaction would only serve todistract our team from these immediate opportunities . "

21 . On March 13, 2006, the stock price of GlobeTel declined from $3 .23 to $2.56

per share, a drop of $0 .67 or 20% .

22. Then, on March 17, 2006, GlobeTel issued another press release, explaining wh y

the Russian deal was again on and moving forward, entitled, "GlobeTel to Revise Payment

Terms of Agreement with Internafta, Extend Time for Payment ." The press release stated in

part :

FORT LAUDERDALE, Fla .--(BUSINESS WIRE)--March 17, 2006--GlobeTelCommunications Corp . (AMEX :GTE) today announced that based upondifferences between the Company and Internafta on the financing process, theparties have agreed to revise their agreement to more accurately reflect the timingof payments GlobeTel expects to receive for the build out of the 30 city wirelessnetwork in Russia and allow Intemafta additional time to begin making payments .

Internafta has informed GlobeTel that its bank recommends that smaller, morefrequent, progress payments be established so that the necessary staged paymentscan be delivered to GlobeTel as and when the network is delivered and installed .These smaller, more frequent, staged payments do not reduce the total capitalvalue of the agreement with GlobeTel Wireless or change any other terms of theagreement . GlobeTel will still receive $600 million for deployment of thenetwork . The exact amount of the new proposed initial deposit, and the size andtiming of the new proposed progress payments, will be discussed and agreed withGlobeTel once the bank has completed its due diligence and when the bank groupformally accepts the terms of Internafta's proposed banking instrument .

The December 2005 contract called for four equal payments of US$150 millioneach, of which the first payment, representing an initial deposit, was to bereceived by GlobeTel in January 2006 . On January 23, 2006, Internafta presentedto GlobeTel a document represented to be a Standby Letter of Credit drawn onBanco do Brasil S .A . (Rio de Janeiro) in the amount of $300 million . This

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Standby Letter of Credit was provided to facilitate the first phase of the networkconstruction . The banking instrument had a maturity date of two years and neededto be confirmed and accepted by a correspondent bank before GlobeTel couldreceive any funds from the instrument . The terms and conditions of whatconstituted an acceptable and functional banking instrument as it related to theDecember 2005 contract became a matter of interpretation between the parties .After extensive negotiations, Internafta agreed to take sole responsibility forfacilitating the financing of their banking instrument in order to be able to presentreadily-available funds to GlobeTel .

Timothy Huff, CEO of GlobeTel stated, "We are in constant communication withInternafta and believe that so long as we feel they are continuing to work in goodfaith and so long as substantive progress is being made on the transaction, it is inthe best interests of GlobeTel and its shareholders to allow the process to continueto its ultimate conclusion . This is a very large transaction that requires solutions tomany commercial issues, the implementation of tailored banking facilities, andthe conformance to many international treaties, regulatory requirements and legalmatters . The parties continue to work in good faith and remain committed tobuilding a state-of-the-art wireless network in Russia. We feel that the processmust be given every reasonable opportunity to succeed given the commercialstakes involved . "

GlobeTel is in regular contact with Internafta, both in person and via a series oftelephone conference calls, concerning the progress of the transaction . FloydBradley, Managing Director of GlobeTel Wireless, met with Maxim Chernizov,the Director General of Internafta, on March 13th and again on March 15th inGermany in order to represent GlobeTel's interests in the ongoing bankingprocess .

During those discussions, Internafta informed GlobeTel that its bankinginstrument is being syndicated by a consortium of banks and that the leadinstitution is a major European bank, instead of the bank that GlobeTel had startedthe process with. Internafta has stated that the banks have successfully completedtheir due diligence regarding the underlying assets of Internafta's shareholdersthat collateralize the banking instrument . The remaining financing procedures arenow under the control of the lead bank, and GlobeTel has been told by Internaftathat all financial institutions involved in the syndication process are attempting tofacilitate the transaction on a "time-is-of-the-essence" basis .

However, Internafta has also informed GlobeTel that the lead bank requiresadditional time in order to secure an external expert opinion to verify both thefeasibility of, and GlobeTel's ability to implement, the business plan for theRussian network . GlobeTel has been told that the bank and its external expertadvisors are currently evaluating the business plan that was developed byGlobeTel as part of the commercial justification of the planned Russian network .This expanded version of the business plan was recently delivered to Internafta a s

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required by the lead bank's project financing and due diligence process .

23 . On news that the Russian deal would proceed, the stock rebounded, increasing

from $2 .33 to $2 .83 per share, an increase of $0.50 or 21% .

24. To this date, nothing has occurred in connection with the Russian deal .

Disclosures at the End of the Class Period

25 . On April 11, 2006, an article by Seth Jayson, published in The Motley Foo l

("TMF"), revealed that the Company's joint venture deal with the Moscow-based lnternafta --

which roughly translates to "international oil" -- lacked any real sense of credibility, much les s

one capable of undertaking and financing a $600 million telecommunications deal. The article,

titled "The GlobeTel Silent Treatment," stated in part :

The silent treatmentFlorida's been providing me with a lot of interesting reading lately. Last week, thefirst bit was a letter sent to me by a lawyer for GlobeTel (AMEX: GTE). In it, hetells me that GlobeTel "in order to protects [sic] its interests and those of itsshareholders, will no longer continue to communicate with you . "

"Accordingly ," it continues , "this will constitute a formal request that youimmediately cease-and -desist from any fu rther communications or inqui riesGOVERN YOURSELF ACCORDINGLY ."

That's a pretty ironic request, given that GlobeTel CEO Tim Huff has previouslycomplained that I didn't try hard enough to talk to him. The real problem, ofcourse, is that I ask hard questions, unlike some of the GlobeTel PR regurgitatorsand apologists out there in the press . That's because it's my job to look out forinvestors, and I think GlobeTel is one of the worst investment ideas out there .

But after reading GlobeTel's latest annual report, it's easy to see why the companywould want to instill an official silent treatment . In past conversations, CEO TimHuff seemed more comfortable talking about his plans for the future, or th eimportant foreign government men involved in the company's far-flung businessdeals. He showed little interest in explaining the firm's financial woes, or its longlist of past ventures that failed to live up to the original promises, such as the verystrange Australian deal . Investors should pay close attention to that, andGOVERN THEMSELVES ACCORDINGLY .

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The ugliest thing in FloridaThe raw numbers alone ought to be enough to frighten investors . For 2005, thisnow two-buck-and-change stock lost $0 .43 per share, or $32 million dollars .That's 2 .5 times greater than 2004's net loss of $13 million, even though revenuesincreased 179%, to $81 .1 million . Of course, losing money like that is an easytask when you only take in a gross profit of $413,679 on that $81 million . To putthat into context, $413,679 was less than half of GlobeTel's travel budget for theyear .

The reason the bottom line didn't look even worse on a per-share basis was thatshareholders saw their stake watered down by a whopping 50% increase in dilutedshares. The share count is skyrocketing, of course, because GlobeTel keeps thismoney-losing strategy rolling by selling shares and other instruments likeconvertible debt -- to the tune of $15 million last year .

The cash burned by operations was $12 .6 million in 2005, and managementmakes its dependence on financing perfectly clear, for those who take the time tocomb through the 10-K. Refer to page 34, where it says " . . . additional cash willstill be needed to support operations . . . [i]f we are unable to obtain the necessaryfunding, the company may have to modify its business plan, reduce or discontinuesome of its operations or seek a buyer for all or part of its assets to continue as agoing concern through 2006 . "

But while outside shareholders are left with the risk and double the pain on thebottom line , officers and directors are doing just fine , thanks. Their compensationrose 85% last year to a combined $ 12 million, or 15% of sales , much of it instock . By the way , many of them have been planning to sell that stock over thepast few months . I find that odd. If I held a large chunk of shares in a companythat was about to bust open a $600 million Russi an WiMax deal, I'd hang onto allof them . I'd buy more whenever I could. In other words , I'd GOVERN MYSELFACCORDINGLY .

Leader in wireless ?Believing in the GlobeTel story requires you to believe that a tiny, money-losingFlorida firm can somehow leapfrog the big boys in telecommunications . Tim Hufftold me on the phone that the reason his firm would beat established equipmentand serv ice providers like Nokia (NYSE : NOK) , Motorola (NYSE: MOT),Vimpelcom (NYSE : VIP) , and Mobile Telesys (NYSE : MBT) is because of thesupe rio rity of its technology -- specifically, its "radios ." If that's t rue (and morethan one telecom analyst has w ritten to me to express major doubts), thenGlobeTel must have one of the most efficient R&D machines in the world .According to the 10-K, total R&D for the year was just more than $2.3 million,and 99% of that sum went to the blimps .

The trail of tearsGlobeTel's big splash in December was for its Russian WiMax deal, the one that

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was supposed to deliver them hundreds of millions of dollars by now, but whichhas mostly produced press releases . This came as no surprise to me, because I'vetaken the time to read GlobeTel's past filings, and I know that delays an dcancellations are par for the GlobeTel course .

Investors who wish to double-check GlobeTel's past record on hot-sounding dealsshould begin with page six of the annual report, where they will find many entriesthat look like this . "In February, 2005, we signed a Letter of Intent (LOI) withBanco Azteca, the fifth largest financial Institution in Mexico . . . However, basedon the business terms presented, the company has decided not to move forwardwith this deal ." In all, of the 10 deals listed on pages six and seven alone, six werecancelled outright, and the rest were rescheduled or otherwise delayed .

More interested in the deals promoted in 2005? Direct your gaze to the pagesbeginning with 50, and you'll see the updates on more recently announcedprojects like the July 7 Daly Dumas joint venture agreement, the July 14Colombian blimp deal, the July 7 RapidMoney deal, the Aug . 1 German wirelessdeal, the Oct . 6 Global Crossing (Nasdaq : GLBC) deal, the Oct . 12 University ofStuttgart Deal, the Dec . 31 Russian WiMax deal, and the Nov . 9 Indian financialservices deal -- none of which has yet yielded any transactions "that would requirerecording or disclosure in the Company's financial statements related to thisagreement." If you think "the money must be on the way," I suggest you go backto page six and read again .

Reconsider all those deals , consider what was said about them at the time, andlook at what has happened since . Then, GOVERN YOURSELFACCORDINGLY .

Chamber of odditiesIf you 're unmoved by large losses and unfulfilled deals, consider some of theother odd tidbits to be found in the 10-K. One of my favorites is the page 42-43description of the "milestone" payments made to acquire GlobeTel's "HotZone"wireless technology .

"Initially, since the milestones to be achieved for the second and third years of thecontract were undefined and it is unknown whether or not such milestones, even ifdefined, will be achieved, the Company had not recorded the additionalconsideration . . . Subsequently, as of Dec . 31, 2005, the Company and HotZoneagreed that any and all milestones, previously undefined, were in fact achieved . "

So, the non-existent milestones were judged fulfilled, and the company recordedfurther payments of $5 million worth of stock . (While you're on page 43, youmight want to review the deal that brought Huff to GlobeTel : a "consulting" dealinvolving his previous company, Global VoIP and "Charterhouse," a Nevis, thenMalaysian, company for a GlobeTel buildout of five networks . The payment toGlobeTel was to be 64 million (later 86 million) shares of an unlisted Australian

13

company, one that ended up being liquidated a year and a half later, causingGlobeTel to write off the entire amount . Instead of being "directly compensated"for this (to my mind, wildly unsuccessful) deal, Tim Huff became an officer anddirector of GlobeTel .

Another interesting deal is the cash and stock payment to ISG Jet, a companyowned by GlobeTel's executive vice president, one Steven King, for "executiveair travel services." ISG Jet is owned by King's holding company INV Group(according to Florida records, formerly InvestorSource Group) and has, accordingto the record here, filed planned sales of more than $2 .8 million worth ofGlobeTel stock since June of 2005 .

And while we're on the subject of insider sales, one of those questions thatGlobeTel doesn't seem to want to answer is whether CEO Tim Huff is a 40%investor in an outfit called Infinity Capital Partners, as he is described in a 2002registration statement . By virtue of the convertible note originally ascribed toInfinity, and later, it seems, ascribed to an unnamed "entity" 40% owned by TimHuff, it looks like we're talking about the same "entity." (It appears most recentlypage 48 of the latest 10-K .)

I find this interesting because one Infinity Capital Partners has been filing plannedshare sales this past year. If Huff is still an investor in this Infinity , I'd like toknow how he squares those sales with his claims to me that he has "not sold"shares . Since GlobeTel is giving me the silent treatment, maybe investors will askfor some clarification , consider the answer, and GOVERN THEMSELVESACCORDINGLY .

Foolish bottom lin eGlobeTel is a great company to watch if you want to learn about complicated(often unfulfilled) business deals, group investor psychology, and money-burningpenny stocks . If you're looking for a foreign telecom player that can produce littlethings like earnings and cash -- you know, the stuff that makes an investmentultimately pay off -- I suggest you look elsewhere . As for GlobeTel, read thefilings, look at the director turnover (page 70) in 2005, look at the recent insiderselling, consider how management is rewarding itself richly while outsideshareholders bear the brunt of the huge losses and dilutive financingarrangements, and GOVERN YOURSELF ACCORDINGLY.

26 . On the news of April 11, 2006, the price of GlobeTel shares plunged 15%, on

unusually high trading volume , falling to $1 . 78 per share, for a drop of $1 .78 per share in on e

day. During the Class Period, the stock traded as high as $3 .92, and currently trades at

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approximately $1 .38 per share . As a result, investors have lost millions of dollars as a result o f

the acts and omissions complained of herein .

POST-CLASS PERIOD REVELATIONS

27. On May 1, 2006, GlobeTel announced that it had instructed its lawyers to prepar e

and deliver a Default Notice to Internafta .

28. On May 1, 2006, The Motley Fool published an article titled "Just Say Nyet, "

providing further details concerning the bogus nature of the Russian Deal, stating in relevant part

as follows :

Let's not belabor the point , OK? No one should be shocked that GlobeTel(AMEX : GTE) finally announced the end of its much-discussed , supposedly $600million Wi-Max deal with a group of Russians .

Investors who like a slick story but aren't as big on reading the details ought tolearn a lesson as well . Toward that painful but noble goal, let's review, shall we?

Until late 2005, tiny GlobeTel was best known for its audacious claims aboutInternet blimps (which have yet to fly) . At the end of December, GlobeTel said ithad made a deal in Russia that would have vaulted it to the top tier of phone,Internet, and networking providers, joining the likes of Nokia (NYSE : NOK) ,Motorola (NYSE: MOT), Cisco (Nasdaq: CSCO), Avaya (NYSE: AV),Vimpelcom (NYSE: VIP), and Mobile Telesys (NYSE: MBT) .

I was pretty skeptical , because, well . . . when a company claims to have a singledeal that's four times its market cap, that doesn't sound right . I took the time to dosome digging, and it didn't take long to discover that big promises with littlepayoffs are quite common with GlobeTel, along with even stranger stories .Unfortunately, the mainstream biz press saw fit to engage in what typically passesfor journalism: Parrot the press releases, make a few calls, quote a few talkingheads .

Read all those filings? Run biographical searches of board and management onYahoo! and the SEC website? Bah! All is well, right? Why be a WilmaWorrywart?

15

Because the writing was on the wall . And investor money was on the line, that'swhy .

Things started to fall apart months back, with delays . Then a final press releaseput the issue to rest, for a while . Then came the annual filing that shows just whatlousy shape GlobeTel's finances are in, on the heels of a vague threat fromGlobeTel's lawyers, which loosely translated to "Hey Fool, stop asking usquestions ." Meanwhile, it looked to me like far too many insiders were headingfor the lifeboats, with a lot of director turnover, and share-sale statements thatlooked mighty odd for insiders in a company supposedly on the verge of profitingfrom so many great breakthrough deals .

Today, the final shoe dropped, with GlobeTel releasing a statement declaring a"formal default" by the Russians. It's worth a careful read, because it shows justhow thin GlobeTel's previous claims look in comparison to this later version ofthe story. Take this gem: "Internafta subsequently delivered to GlobeTel terms ofa US $300 million Letter-of-Credit on Banco do Brazil letterhead . It wasthereafter determined by GlobeTel that the terms were not acceptable to any ofGlobeTel's bankers . "

It was thereafter determined that the terms were not acceptable ? Why not? Arewe talking about funny money here? Fake credit ? Insufficient funds? What ?

Or, more to the point, why release all the sunny PR beforehand if the financing --as well as the detailed business plan, according to this latest release -- was still upin the air? I'm guessing that's just another one of those questions GlobeTel won'twant to answer, but I'm hoping a few shareholders will ask it . (And sinceGlobeTel won't talk to me, feel free to send me the answer . My email's at thebottom of this article . )

The rest of the release looks like another excuse-o-rama to me, with the typicalverbiage aimed at explaining how this certainly isn't GlobeTel's fault -- a bonetossed to the faithful . GlobeTel says it will "open itself up to new negotiationswith other significant parties in Russia, including an important entity that hasapproached GlobeTel, regarding a wireless network installation in Russia . "

I don't buy the last bit, but I do think it's possible that GlobeTel wasoutmaneuvered by the still-mostly-nameless Russian federation . But I won't becrying too many tears for GlobeTel managers and their $12 million worth ofcompensation last year -- on gross earnings of only $413,729 .

The real victims in this ordeal are those unfortunate investors who loaded the boaton GlobeTel and believed in all that copious press back in the beginning of theyear. The stock has tanked more than 60% since early January . Anyone who'stempted to get back into this game should take a hard look at the record, and tak e

16

this advice , which was sent to me by a lawyer on behalf of the good folks atGlobeTel themselves : GOVERN YOURSELF ACCORDINGLY .

CLASS ACTION ALLEGATION S

29. Plaintiff b rings this action as a class action pursuant to Federal Rule of Civi l

Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased th e

securities of GlobeTel between December 30, 2005 through April 11, 2006 , inclusive (the "Class

Period"), and who were damaged thereby . Excluded from the Class are defendants, the officer s

and directors of the Company, at all relevant times, members of their immediate families an d

their legal representatives, heirs, successors or assigns and any entity in which defendants hav e

or had a controlling interest .

30 . The members of the Class are so numerous that joinder of all members i s

impracticable . Throughout the Class Period, GlobeTel securities were actively traded on th e

AMEX . While the exact number of Class members is unknown to Plaintiff at this time and ca n

only be ascertained through appropriate discovery, Plaintiff believes that there are hundreds o r

thousands of members in the proposed Class . Record owners and other members of the Class

may be identified from records maintained by GlobeTel or its transfer agent and may be notifie d

of the pendency of this action by mail, using the form of notice similar to that customarily use d

in securities class actions .

31 . Plaintiff's claims are typical of the claims of the members of the Class as al l

Members of the Class are similarly affected by defendants' wrongful conduct in violation of

federal law that is complained of herein .

32. Plaintiff will fairly and adequately protect the interests of the members of the

Class and has retained counsel competent and experienced in class and securities litigation .

33 . Common questions of law and fact exist as to all members of the Class and

17

predominate over any questions solely affecting individual members of the Class . Among the

questions of law and fact common to the Class are :

a. whether the federal securities laws were violated by defendants' acts as

alleged herein ;

b. whether statements made by defendants to the investing public during th e

Class Period misrepresented material facts about the business, operations and management o f

GlobeTel ; and

c. to what extent the members of the Class have sustained damages and the

proper measure of damages .

34. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable . Furthermore, as

the damages suffered by individual Class members may be relatively small, the expense and

burden of individual litigation make it impossible for members of the Class to individuall y

redress the wrongs done to them . There will be no difficulty in the management of this action a s

a class action.

LOSS CAUSATION

35. Defendants' wrongful conduct, as alleged herein, directly and proximately cause d

the economic loss suffered by Plaintiff and the Class .

36. During the Class Period, Plaintiff and the Class purchased securities of GlobeTe l

at artificially inflated prices and were damaged thereby . The price of GlobeTel common stock

reacted when the misrepresentations made to the market, and/or the information alleged herein t o

have been concealed from the market, and/or the effects thereof, were revealed, causin g

investors ' losses .

18

Applicability Of Presumption Of Reliance :Fraud-On-The-Market Doctrin e

37. At all relevant times, the market for GlobeTel securities was an efficient

market for the following reasons, among others :

a. GlobeTel stock met the requirements for listing, and was listed an d

actively traded on the AMEX, a highly efficient and automated market ;

b. As a regulated issuer, GlobeTel filed periodic public reports with th e

SEC and the AMEX ;

GlobeTel regularly communicated with public investors via

established market communication mechanisms, including through regular disseminations o f

press releases on the national circuits of major newswire services and through other wide-

ranging public disclosures, such as communications with the financial press and other simila r

reporting services ; and

d. GlobeTel was followed by several secu rities analysts employed b y

major brokerage firms who wrote reports which were distributed to the sales force and certai n

customers of their respective brokerage firms . Each of these reports was publicly available an d

entered the public marketplace .

38 . As a result of the foregoing, the market for GlobeTel securities promptl y

digested current information regarding GlobeTel from all publicly-available sources and

reflected such information in GlobeTel stock price . Under these circumstances, all purchasers o f

GlobeTel securities during the Class Period suffered similar injury through their purchase o f

GlobeTel securities at artificially inflated prices and a presumption of reliance applies .

NO SAFE HARBOR

39. The statutory safe harbor provided for forward-looking statements under certain

19

circumstances does not apply to any of the allegedly false statements pleaded in this

complaint . Many of the specific statements pleaded herein were not identified as forward-

looking statements when made . To the extent there were any forward-looking statements ,

there were no meaningful cautionary statements identifying important factors that coul d

cause actual results to differ materially from those in the purportedly forward- looking

statements . Alternatively, to the extent that the statutory safe harbor does apply to an y

forward-looking statements pleaded herein, defendants are liable for those false forward-

looking statements because at the time each of those forward-looking statements was

made, the particular speaker knew that the particular forward-looking statement wa s

false, and/or the forward-looking statement was authorized and/or approved by a n

executive officer of GlobeTel who knew that those statements were false when made .

FIRST CLAIM

Violation Of Section 10(b) OfThe Exchange Act And Rule 10b-5

Promulgated Thereunder Against All Defendant s

40. Plaintiff repeats and realleges each and every allegation contained abov e

as if fully set forth herein .

41 . During the Class Period, defendants carried out a plan, scheme and cours e

of conduct which was intended to and, throughout the Class Period, did : (i) deceive the

investing public, including Plaintiff and other Class members, as alleged herein; and (ii)

cause Plaintiff and other members of the Class to purchase GlobeTel securities at

artificially inflated prices . In furtherance of this unlawful scheme, plan and course o f

conduct, defendants, and each of them, took the actions set forth herein .

42. Defendants (a) employed devices, schemes, and artifices to defraud; (b)

20

made untrue statements of material fact and/or omitted to state material facts necessary t o

make the statements not misleading ; and (c) engaged in acts, practices, and a course o f

business which operated as a fraud and deceit upon the purchasers of the Company' s

securities in an effort to maintain artificially high market prices for GlobeTel secu rities in

violation of Section 10(b) of the Exchange Act and Rule IOb-5 . All defendants are sued

either as primary participants in the wrongful and illegal conduct charged herein or as

controlling persons as alleged below .

43. Defendants, individually and in concert, directly and indirectly, by the use ,

means or instrumentalities of interstate commerce and/or of the mails, engaged and

participated in a continuous course of conduct to conceal adverse material informatio n

about the business , operations and future prospects of GlobeTel as specified herein .

44. These defendants employed devices, schemes and artifices to defraud ,

while in possession of material adverse non-public information and engaged in acts ,

practices, and a course of conduct as alleged herein in an effort to assure investors o f

GlobeTel's value and performance and continued substantial growth, which included th e

making of, or the participation in the making of, untrue statements of material facts an d

omitting to state material facts necessary in order to make the statements made abou t

GlobeTel and its business operations and future prospects in the light of the

circumstances under which they were made, not misleading, as set forth more particularl y

herein, and engaged in transactions, practices and a course of business which operated a s

a fraud and deceit upon the purchasers of GlobeTel securities during the Class Period .

45. The Individual Defendants' primary liability, and controlling perso n

liability arises from the following facts : (i) the Individual Defendants were high-level

21

executives and/or directors at the Company during the Class Period and members of th e

Company' s management team or had control thereof; ( ii) these defendants, by virtue of

their responsibilities and activities as senior officers and/or directors of the Compan y

were privy to and part icipated in the creation , development and repo rting of the

Company' s internal budgets , plans , projections and/or reports ; ( iii) these defendants

enjoyed significant personal contact and familiarity with the other defendants and were

advised of and had access to other members of the Company's management team ,

internal reports and other data and information about the Company's finances, operations ,

and sales at all relevant times ; and (iv) these defendants were aware of the Company' s

dissemination of information to the investing public which they knew or recklessl y

disregarded was materially false and misleading . Indeed, defendant Huff participated

directly in meetings with principles of the Russian Deal .

46 . The defendants had actual knowledge of the misrepresentations and

omissions of material facts set forth herein, or acted with reckless disregard for the trut h

in that they failed to ascertain and to disclose such facts, even though such facts were

available to them. Such defendants= material misrepresentations and/or omissions wer e

done knowingly or recklessly and for the purpose and effect of concealing GlobeTel' s

operating condition and future business prospects from the investing public and

supporting the artificially inflated price of its securities . As demonstrated by defendants '

overstatements and misstatements of the Company's business, operations and earning s

throughout the Class Period, defendants, if they did not have actual knowledge of th e

misrepresentations and omissions alleged, were reckless in failing to obtain suc h

knowledge by deliberately refraining from taking those steps necessary to discover

22

whether those statements were false or misleading .

47 . As a result of the dissemination of the materially false and misleadin g

Information and failure to disclose material facts, as set forth above, the market price o f

GlobeTel securities was artificially inflated during the Class Period . In ignorance of th e

fact that market prices of GlobeTel's publicly-traded securities were artificially inflated ,

and relying directly or indirectly on the false and misleading statements made by

defendants, or upon the integrity of the market in which the securities trades, and/or o n

the absence of material adverse information that was known to or recklessly disregarde d

by defendants but not disclosed in public statements by defendants during the Clas s

Period, Plaintiff and the other members of the Class acquired GlobeTel securities during

the Class Period at artificially high prices and were damaged thereby .

48 . At the time of said misrepresentations and omissions , Plaintiff and other

members of the Class were ignorant of their falsity, and believed them to be true . Had

Plaintiff and the other members of the Class and the marketplace known the truth

regarding the problems that GlobeTel was experiencing , which were not disclosed b y

defendants, Plaintiff and other members of the Class would not have purchased or

otherwise acquired their GlobeTel securities, or, if they had acquired such securities

during the Class Period, they would not have done so at the artificially inflated prices

which they paid.

49. By virtue of the foregoing, defendants have violated Section 10(b) of th e

Exchange Act, and Rule I Ob-5 promulgated thereunder .

50. As a direct and proximate result of defendants' wrongful conduct, Plaintiff

and the other members of the Class suffered damages in connection with their respectiv e

23

purchases and sales of the Company's securities during the Class Period .

SECOND CLAI M

Violation Of Section 20(a) O fThe Exchange Act Against the Individual Defendants

51 . Plaintiff repeats and realleges each and every allegation contained abov e

as if fully set forth herein .

52. The Individual Defendants acted as controlling persons of GlobeTel

within the meaning of Section 20(a) of the Exchange Act as alleged herein . By virtue o f

their high-level positions, and ownership and contractual rights, participation in and/o r

awareness of the Company's operations and/or intimate knowledge of the false financia l

statements filed by the Company with the SEC and disseminated to the investing public ,

the Individual Defendants had the power to influence and control and did influence an d

control, directly or indirectly, the decisionmaking of the Company, including the conten t

and dissemination of the various statements which Plaintiff contends are false and

misleading . The Individual Defendants were provided with or had unlimited access to

copies of the Company' s reports , press releases , public filings and other statement s

alleged by Plaintiff to be misleading prior to and/or shortly after these statements were

issued and had the ability to prevent the issuance of the statements or cause th e

statements to be corrected .

53 . In particular, the Individual Defendants had direct and supervisory

involvement in the day-to-day operations of the Company and, therefore, are presumed to

have had the power to control or influence the particular transactions giving rise to the

securities violations as alleged herein, and exercised the same .

24

54. As set forth above, GlobeTel and the Individual Defendants each violate d

Section 10(b) and Rule I Ob-5 by their acts and omissions as alleged in this Complaint . By

virtue of their positions as controlling persons , the Individual Defendants are liabl e

pursuant to Section 20(a) of the Exchange Act . As a direct and proximate result o f

defendants' wrongful conduct, Plaintiff and other members of the Class suffered damage s

in connection with their purchases of the Company's securities during the Class Period .

PRAYER FOR RELIEF

WHEREFORE , Plaintiff prays for relief and judgment, as follows:

A. Determining that this action is a proper class action, designatin g

Plaintiff as Lead Plaintiff and certifying Plaintiff as a class representative under Rule 23

of the Federal Rules of Civil Procedure and Plaintiff' s counsel as Lead Counsel ;

B. Awarding compensatory damages in favor of Plaintiff and th e

other Class members against all defendants, jointly and severally, for all damages

sustained as a result of defendants' wrongdoing, in an amount to be proven at trial ,

including interest thereon;

C . Awarding Plaintiff and the Class their reasonable costs and

expenses incurred in this action, including counsel fees and expert fees ; and

D. Such other and further relief as the Court may deem just an d

proper .

25

JURY TRIAL DEMANDED

Plaintiff hereby demands a trial by jury .

Respectfully submitted,

Dated : May2006 LABATON SUCHAROW& RUDOFF LL P

By :Emily C Komlossy

FBN: 007714ekomlossy@labaton .comDiane M . SimonsFBN: 732680dsimons@ labaton.com3595 She ridan Street , Suite 206Hollywood , Flo rida 33021Telephone: (954) 322-8601Facsimile: (954) 565-1312

GLANCY BINKOW & GOLDBERG LLPLionel Z . GlancyMichael Goldberg1801 Avenue of the Stars, Suite 311Los Angeles, California 90067Telephone: (310) 201-9150Facsimile : (310) 201-9160

POMERANTZ HAUDEK BLOCKGROSSMAN & GROSS LLP

Patrick V. Dahlstro mOne North La Salle Street, #2225Chicago, Illinois 60602Telephone : (312) 377-1181Facsimile : (312) 377-118 4

LAW OFFICES OF HOWARD G.SMITHHoward G. Smith3070 Bristol Pike, Suite 112Bensalem, Pennsylvania 19020Telephone: (215) 638-4847Facsimile: (215) 638-486 7

Attorneys for Plaintiff

26

SWORN CERTIFICATION OF PLAINTIFF SHAREN A. KIRKHAMGLOBETEL COMMUNICATIONS CORP . SECURITIES LITIGATION

I, Sharen A . Kirkham, certify that :

1 . I have reviewed the Complaint and authorized its filing .

2 . Plaintiff did not purchase the security that is the subject of this action, at the direction ofplaintiffs counsel or in order to participate in any private action arising under this title .

3 . I am willing to serve as a representative party on behalf of a class and will testify at depositionand trial, if necessary .

4 . My transactions in the securities, which are the subject of this action, during the Class Periodset forth in the Complaint are as follows :

Purchased 300 shares on 12/30/2005 for the price of $3 .85 per share .

5. I have not served as a representative party on behalf of a class under the federal security lawsduring the last three years, except if detailed below .

6. I will not accept any payment for serving as a representative party, except to receive my prorata share of any recovery or as ordered or approved by the court including the award to arepresentative plaintiff of reasonable costs and expenses (including lost wages) directly relatingto the representation of the class .

OYes • No Are you now or were you ever an employee of the company ?

I declare under penalty of perjury that the foregoing are true and correct statements .

Dated: May 23, 2006 /s/Sharen A. Kirkham(Submitted Electronically)

;44 (Rev . 11/05) CIVIL COVER SHEE TeJS44civil coversl>-et and the information contained herein neither replace nor supplement the filing andser 1' 1e$

local rules of court ;'his form, approved by the Judicial Conference of the United States in September 1974. u

civil docket sheet. LSEE INSTRUCTIONS ON THE REVERSE OF THE FORM.) NOTICE : A ttorneys )

(a) PLAINTIFFS;HAREN KIPJc AM, Individually and On Behalf

:)f All Others Similarly Situated ,

(b) Coun ty ofP,esidence of First Listed Plaintiff Denton County, TX

(EXCEPT IN U .S . PLAINTIFF CASES)

E) Attorneys (Firs 'Name, Address, and Telephone Number)

,ABATON SU44AROW & RUDOFF LL P

595 Sheridan Street, Suite #206, Hollywood, FL 33021

DEFE

e s uired' y lav except as prov'd.o ourt r the ntirpose of mit at

e ~ ii ed Cases Below. L

GLOBETEL COMMUNICATIONS CORP .,TTh Y HY HUFF and LAWPENCE LYNCH ,County of Residence of First Listed Defendant ) ° N~I ON

(IN U .S. PLAINTIFF CASES ONLY)

NOTE . IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE TRACI

LAND INVOLVED .

Attorneys (If Known)

0, (2a" O_77 Z)&~!//wrN

(d) Check County Where Action Arose : C3 MIAMI- DADS C1 MONROE 611 BROWARD ❑ PALM BEACH O MARTIN ❑ ST . L CIE ❑PII~IAN

RIVER O-PKEECHOBEE

E

BASIS OF JURISDICTION ( Place an " X" in One Box Only) III . CITIZENSHIP OF PRIN CIPAL PARTIIS( Place an'"X" ;JJne Box for Plamti fII . (For Diversity Cases Only) and`>3,ne Bop or Defendant)

U .S . Govemtnent 3❑ 1

Federal Question PTF DEF PTF DEF

Plaintiff ( U .S . Gove rnment Not a Party ) Citizen of This State ❑ 1 ❑ I Incorporated-or PrincipatP1Qce ❑ 4 ❑ 4of Business Its,This S

US Govern ment ❑ 4 Diversity Citizen of Another State ❑ 2 ❑ 2 lncorporateff id Pri 5 ❑ 52

Defendant ( Indicate Citizenship of Parties in Item III ) of Business in Anothe

N

Citizen or Subject of a ❑ 3 ❑ 3 Foreign Nat T 6 71 6Foreign Country

_ . . ri tnZ !1G Qi RT lnIaen. an "X" in One Box Only) r- - rD J . 1

PERSONAL INJURY PERSONAL INJURY O 610 Agriculture ❑ 422 Appeal 28 USC 158 ❑ 9~tate Reartort ionmen t❑ 1101nsurance

❑ 310 Airplane O 362 Personal Inju ry - ❑ 620 Other Food & Drug ❑ 423 Withdrawal ❑ 410 Antitrust rr❑ 120 Marine

❑ 130 Miller Act❑ 315 Airplane Product Med . Malpractice ❑ 625 Drug Related Seizure 28 USC 157 ❑ 430 Banks and Banking

tiable Instrument Liability ❑ 365 Personal Injury - of Property 21 USC 881 ❑ 450 Commerc e❑ 140 Nego

f Overpayment ❑ 320 Assault, Libel & Product Liability ❑ 630 Liquor Laws PROPERTY RIGHTS ❑ 460 Deportatio n❑ 150 Recove ry o

forcement of JudgmentE

Slander ❑ 368 Asbestos Personal ❑ 640 R .R . & Truck ❑ 820 Copyrights ❑ 470 Racketeer Influenced an dn&

❑151 Medicare Act ❑ 330 Federal Employers' Injury Product ❑ 650 Airline Regs . ❑ 830 Patent Corrupt Organization s

O 152 Recovery of Defaulted Liabili ty Liability ❑ 660 Occupational ❑ 840 Trademark ❑ 480 Consumer Credi t

Student Loans ❑ 340 Ma ri ne PERSONAL PROPERTY Safety/ Health ❑ 490 Cable/Sat TV

Veterans)l ❑ 345 Ma rine Product ❑ 370 Other Fraud ❑ 690 Other ❑ 810 Selective Servic e.(Excmen tf Over a Liability ❑ 371 Truth in Lending LABOR SOCIAL SECURITY la 850 Securities/Commoditie sp y

❑ 153 Recove ry o

of Veteran's Benefits ❑ 350 Motor Vehicle ❑ 380 Other Personal ❑ 710 Fair Labor Standards ❑ 861 HIA ( 1395ff) Exchange

❑ 160 Stockholde rs' Suits ❑ 355 Motor Vehicle Prope rty Damage Act ❑ 862 Black Lung ( 923) ❑ 875 Customer Challenge

190 Other Contract Product Liability ❑ 385 Property Damage ❑ 720 Labor /Mgmt . Relations ❑ 863 DI WC / DI W W (405 (g)) 12 USC 341 0❑

ntract Product LiabilityC

❑ 360 Other Personal Product Liability ❑ 730 Labor/ Mgmt .Repo rting ❑ 864 SSID Title XVI ❑ 890 Other Statuto ry Actionso❑ 195

hise Injury & Disclosure Act ❑ 865 RSI 405O ❑ 891 Agricultural Acts❑ 196 Franc

PROPERTY CIVIL RIGHTS PRISONER PETITIONS ❑ 740 Railway Labor Act FEDERAL TAX SUITS ❑ 892 Economic Stabilization Ac iREALi VM a 790 i210 Land Condemnation ❑ 441 Voting ot ons to acat e❑ 510 Other Labor Lit gation -0 870 Taxes ( U .S . Plaintiff ❑ 893 Environmental Ma tters

❑220 Foreclosure ❑ 442 Employment Sentence ❑ 791 Empl . Ret . Inc . or Defendant) ❑ 894 Energy Allocation Ac t

❑0 Rent Lease & Ejectment ❑ 443 Housing/ Habeas Corpus : Securi ty Act ❑ 871 IRS-Third Party ❑ 895 Freedom of Information

❑ 2 3

❑ 240 Torts to Land Accommodation sions 53 0O General 2 6 USC 7609 Act

245 Tort Product Liability ❑ 444 C1 535 Death Penalty ❑ 900Appeal of Fee Determinatio❑

90 All other Real Property ❑ 445 Amer . w/Disabilities - ❑ 540 Mandamus & Other Under Equal Acces s❑ 2

Employment ❑ 550 Civil Rights to Justic e

❑ 446 Amer . w/Disabilities - ❑ 555 P ri son Condition ❑ 950 Constitutionality o f

Other S ta te Statutes❑ 440 Other Civil Rights

V. ORIGIN ( Place an " X" in One Box Only) Transferred fromAppeal to Distric tJudge fro m

inal Q 2O ri g Removed from 0 3 Re-filed- Q 4 Reinstated or O 5 another district 0 6 Multidistrict 0 7 Magistrateproceeding StateCourt ( see VI below ) Reopened Litigation(specify ) Judgment

a) Re-fi led Case O YES ONO b) Related Cases V YES J NORELATED/RE-FILE D

VI ( See instructions.CASE ( S)• second page) : JUDGE CECILIA M . DOCKETALTONAGA NUMBER 06-CV-2107 1

Cite the U . S . Civil Statute under which you are tiling and Write a Brief Statement of Cause ( Do not cite jurisdictional statutes unlessdiversity) :

VII. CAUSE OF Sections 10(b) and 20 of the Securities Act of 1934, 15 U .S .C . sec . 78j(b) and 78t, and Rule lOb-5, 17 C .F .R .ACTION sec . 240 .10b- 5

LENGTH OF TRIAL via j1 days estimated (for both sides to try entire case )

VIII . REQUESTED IN 0 CHECK IF THIS IS A CLASS ACTION DEMAND $ Unknown CHECK YES only if de manded in complaint :

COMPLAINT : UNDER F .R.C .P . 23 JURY DEMAND : 0 Yes rO N o

ABOVE INFORMATION IS TRUE & CORRE TO SIGN U OF ATT?ttN EY OF RECORD DAT E

OF MY KNOWLEDGE~ITHE BEST

1, r/L 007714 O

FOR OFFICE US EONLY

w5 f~0/ fN ~7-,