Van Wagoner is finding itself the subject of a class action lawsuit. The Bala Cynwyd, Pennsylvania law firm of Schiffrin & Barroway is pursuing a case in United States District Court for the Eastern District of Wisconsin concerning Van Wagoner's Emerging Growth Fund (VWEGX).

The complaint names the following firms as defendants: Van Wagoner Funds, Inc., Van Wagoner Capital Management, Inc., Sunstone Financial Group, Inc., Van Wagoner Emerging Growth Fund, Garrett R. Van Wagoner, Larry P. Arnold, Robert S. Colman, and Ernst and Young, LLP. These firms allegedly issued false and misleading statements concerning the fund's net asset value (NAV) and performance.

The plaintiffs allege that Ernst & Young did not follow accepted accounting and auditing stadnards when it approved the net assets used by Van Wagoner between year-end 1999 and year-end 2000. They go on to allege that these statements were "materially false and misleading" because the NAV was overstated, the fund's performance was overstated, and the risk in investing in the fund was understated.

The law firm has issued a statement to all of those who invested in the fund from April 28, 2000 through June 30, 2001 as to whether or not they might wish to participate in the suit.

For more information on the lawsuit, follow this link. 

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