DIAMOND MULTIMEDIA CLASS ACTION LITIGATION

DEFENDANTS
COURT
ALLEGE
ALLEGATIONS
COMPLAINT
INVENTORY
GRANT
SAN FRANCISCO
DIAMOND
LLP
DIRECTORS
SILICON GRAPHICS
SLIP
GRANT DECL
DECLARATION
SECURITIES
PLEADING
INFERENCE
FUGMAN
EXCHANGE ACT
RECOGNIZING
ACCOUNTING
REPRESENTATIONS
DISMISS
AUTHORITIES
DISCOVERY
RECKLESS
LITIG
FACTS


   MILBERG WEISS BERSHAD
     HYNES & LERACH LLP
   ALAN SCHULMAN (128661)
   MARK SOLOMON (151949)
   SALLIE A. BLACKMAN (141830)
   600 West Broadway, Suite 1800
   San Diego, CA 92101
   Telephone: 619/231-1058
        - and -
   JOHN K. GRANT (169813)
   222 Kearny Street, 10th Floor
   San Francisco, CA 94108
   Telephone: 415/288-4545

   ABBEY, GARDY & SQUITIERI, LLP
   JILL S. ABRAMS
   JAMES J. SEIRMARCO
   212 East 39th Street
   New York, NY 10016
   Telephone: 212/889-3700

   BERNSTEIN LITOWITZ BERGER &
     GROSSMANN LLP
   DANIEL L. BERGER
   JEFFREY N. LEIBELL
   1285 Avenue of the Americas
   33rd Floor
   New York, NY 10019
   Telephone: 212/554-1400

   Attorneys for Lead Plaintiffs and the Class


                        UNITED STATES DISTRICT COURT

                      NORTHERN DISTRICT OF CALIFORNIA

                              OAKLAND DIVISION



   In re DIAMOND MULTIMEDIA SYSTEMS,
   INC. SECURITIES LITIGATION

   ______________________________________

   This Document Relates to:

SNIPPETS:

MILBERG WEISS BERSHAD HYNES & LERACH LLP ALAN SCHULMAN MARK SOLOMON SALLIE A. BLACKMAN

San Francisco, CA 94108 Telephone:

UNITED STATES DISTRICT COURT

SUBMISSION ADDRESSING RECENT AUTHORITIES IN FURTHER SUPPORT OF PLAINTIFFS'

Plaintiffs' allege in this action that between October 18, 1995 and June 20, 1996, defendants

Throughout the Class Period defendants made particular false representations about the

They also violated particular Generally Accepted Accounting Principles and rules with respect

The sufficiency of plaintiffs' allegations is determined by application of the Securities

A to John K. Grant Declaration, hereinafter "Grant Decl.") the court, quoting from Rehm v.

Fugman, 1997 U.S. Dist.

The Fugman court upheld plaintiffs' securities fraud complaint stating also that there,

May 27, 1997), ("Grant Decl., Ex.

In upholding the complaint, the court, while clearly leaning toward adopting Second Circuit

Plaintiffs have also made particularized allegations that defendants' representations of

The most recent decision in In re Silicon Graphics,

The court upheld the accounting allegations (pled with the benefit of discovery), the

the court applied the group publication presumption to so-called "outside directors" who,

Moreover, as the Silicon Graphics court acknowledged, the group publication presumption is

DECLARATION OF SERVICE BY MAIL

In Zeid, the court held that unqualified recklessness is sufficient scienter; that the Second

2 . STATEMENT OF RECENT DECISIONS

EXTRACTED KEY WORDS

DEFENDANTS
PLAINTIFFS
ANALYSTS
SAN DIEGO
LLP
CIR
LEXIS
DECLARE
APP
PICKETT
ITRON
SECURITIES
CALIFORNIA
COURT
BERGER
YORK
SYNTEX
STAC
HOLDING
FACTS
LOCAL RULE
PURSUANT
NORTHERN DISTRICT
UNITED STATES
MARK SOLOMON
LERACH LLP
HYNES
MILBERG WEISS BERSHAD
OPINION


   MILBERG WEISS BERSHAD
   HYNES & LERACH LLP
   ALAN SCHULMAN (128661)
   MARK SOLOMON (151949)
   KRISTEN McCULLOCH (177558)
   600 West Broadway, Suite 1800
   San Diego, CA 92101
   Telephone: 619/231-1058
        - and -
   JOHN K. GRANT (169813)
   222 Kearny Street, 10th Floor
   San Francisco, CA 94108
   Telephone: 415/288-4545

   ABBEY, GARDY & SQUITIERI, LLP
   JILL S. ABRAMS
   JAMES J. SEIRMARCO
   212 East 39th Street
   New York, NY 10016
   Telephone: 212/889-3700

   BERNSTEIN LITOWITZ BERGER &
   GROSSMANN LLP
   DANIEL L. BERGER
   JEFFREY N. LEIBELL
   1285 Avenue of the Americas
   33rd Floor
   New York, NY 10019
   Telephone: 212/554-1400

   Attorneys for Lead Plaintiffs and the Class

                        UNITED STATES DISTRICT COURT

                      NORTHERN DISTRICT OF CALIFORNIA

                              OAKLAND DIVISION


   In re DIAMOND MULTIMEDIA SYSTEMS, INC.
   SECURITIES LITIGATION

   __________________________________________

   This Document Relates to:
   ALL ACTIONS.
   __________________________________________

SNIPPETS:

MILBERG WEISS BERSHAD HYNES & LERACH LLP ALAN SCHULMAN MARK SOLOMON

San Diego, CA 92101 Telephone:

New York, NY 10016 Telephone:

BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP DANIEL L. BERGER JEFFREY N. LEIBELL

Attorneys for Lead Plaintiffs and the Class

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

INC. SECURITIES LITIGATION

Pursuant to Local Rule 7-3, plaintiffs hereby submit, without argument, the recent decisions

LEXIS 659 (E.D. Wash.

Jan. 22, 1998) and Cooper v. Pickett, No. 95-55657, 1997 U.S. App.

Jan. 30, 1998), attached respectively hereto as Exhibits A and B, in further support of their

The court in Itron held, interalia, that plaintiffs satisfy the heightened scienter pleading

LEXIS 659, at *33-*34 (citing Cosmas v. Hassett, 886 F.2d 8, 10 (2d Cir.

The Cooper decision submitted by plaintiffs has now been amended.The Cooper court amended

Cooper, 1997 U.S. App.

The amended Cooper opinion reiterates that holding and, in addition, expressly distinguishes

ur decisions in Stac and Syntex did not consider whether corporate defendants could be

MILBERG WEISS BERSHAD HYNES & LERACH LLP ALAN SCHULMAN MARK SOLOMON

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

3 . STATEMENT OF RECENT DECISIONS 2

EXTRACTED KEY WORDS

PLAINTIFFS
COURT
MOTION
SECURITIES
SCIENTER
DISMISS
SAN FRANCISCO
LERACH LLP
PLEADING
EXHIBIT
RECKLESSNESS
PURSUANT
CALIFORNIA
NORTHERN DISTRICT
FACTS
LEXIS
SCIENTER REQUIREMENT
OPPOSITION
LOCAL RULE
BERNSTEIN LITOWITZ BERGER
MARK SOLOMON
INFERENCE
ALLEGATIONS
COMPLAINT
PARALLEL STATE ACTIONS
SECURITIES LITIGATION
UNITED STATES
ATTORNEYS
HYNES

   MILBERG WEISS BERSHAD

   HYNES & LERACH LLP

   ALAN SCHULMAN (128661)

   MARK SOLOMON (151949)

   600 West Broadway, Suite 1800

   San Diego, CA 92101

   Telephone: 619/231-1058

   - and -

   JOHN K. GRANT (169813)

   KIMBERLY C. EPSTEIN (169012)

   222 Kearny Street, 10th Floor

   San Francisco, CA 94108

   Telephone: 415/288-4545

   ABBEY, GARDY & SQUITIERI, LLP

   JILL S. ABRAMS

   JAMES J. SEIRMARCO (194307)

   212 East 39th Street

   New York, NY 10016

   Telephone: 212/889-3700

   BERNSTEIN LITOWITZ BERGER &

   GROSSMANN LLP

   DANIEL L. BERGER

   JEFFREY N. LEIBELL

   1285 Avenue of the Americas

SNIPPETS:

HYNES & LERACH LLP

MARK SOLOMON

San Francisco, CA 94108

BERNSTEIN LITOWITZ BERGER &

Attorneys for Lead Plaintiffs and the Class

UNITED STATES DISTRICT COURT

PLAINTIFFS' STATEMENT OF RECENT DECISIONS PURSUANT

TO LOCAL RULE 7-3IN FURTHER SUPPORT OF PLAINTIFFS'

OPPOSITION TO DEFENDANTS' MOTIONS TO DISMISS

DECISIONS IN PARALLEL STATE ACTIONS

As this Court is aware, parallel actions involving the same parties are pending in California

Orders have been entered in those actions upholding plaintiffs' claims against the Diamond

Exhibit B: Simon, et al. v. Huh, et al., Case No. CV766990, Order on Defendant Huh's Demurrer

In City of Painesville, 178 F.R.D. at 187, the court addressed the requirement of alleging a

Specifically, as plaintiffs have pled their allegations based on investigation of the

LEXIS 6903 (W.D.

LEXIS 6903, *56, the court addressed the application of the bespeaks caution doctrine: The

In Zuckerman, ¶90,186, at 90,655, the court addressed the adequacy of pleading motive and ent intent.

at 728, the court addressed the adequacy of pleading recklessness to establish scienter: In

("under the PSLRA a plaintiff in a private securities litigation action must now plead

PURSUANT TO NORTHERN DISTRICT LOCAL RULE 23-2

4 . REQUEST FOR JUDICIAL NOTICE

EXTRACTED KEY WORDS

SAN FRANCISCO
LLP
EXHIBIT
COURT
CIR
UNIFORM STANDARDS ACT
UNIFORM STANDARDS
OPPOSITION
AUTHORITY
JUDICIAL NOTICE
SECURITIES LITIGATION
UNITED STATES
DECLARE
CALIFORNIA
BERGER
YORK
HERETO
PRESIDENT
SUPPLEMENTAL MEMORANDUM
ACTION COMPLAINT
CONSOLIDATED CLASS
AMENDED CONSOLIDATED CLASS
DISMISS PLAINTIFFS
MOTION
DEFENDANTS
SUPPLEMENTAL SUBMISSION
REQUEST
NORTHERN DISTRICT
FLOOR

   MILBERG WEISS BERSHAD

   HYNES & LERACH LLP

   ALAN SCHULMAN (128661)

   MARK SOLOMON (151949)

   600 West Broadway, Suite 1800

   San Diego, CA 92101

   Telephone: 619/231-1058

   - and -

   JOHN K. GRANT (169813)

   KIMBERLY C. EPSTEIN (169012)

   222 Kearny Street, 10th Floor

   San Francisco, CA 94108

   Telephone: 415/288-4545

   ABBEY, GARDY & SQUITIERI, LLP

   JILL S. ABRAMS

   JAMES J. SEIRMARCO (194307)

   212 East 39th Street

   New York, NY 10016

   Telephone: 212/889-3700

   BERNSTEIN LITOWITZ BERGER &

   GROSSMANN LLP

   DANIEL L. BERGER

   JEFFREY N. LEIBELL

   1285 Avenue of the Americas

SNIPPETS:

San Francisco, CA 94108

ABBEY, GARDY & SQUITIERI, LLP

New York, NY 10016

BERNSTEIN LITOWITZ BERGER &

33rd Floor

Attorneys for Lead Plaintiffs and the Class

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

Plaintiffs respectfully submit the following request for judicial notice and supplemental

Action Complaint, filed April 7, 1997.

On November 3, 1998, President Clinton signed into law the Securities Litigation Uniform

No. 105-803 is attached hereto as Exhibit A and President Clinton's November 3, 1998

A copy of the SEC's supplemental memorandum is attached hereto as Exhibit C.

PURSUANT TO NORTHERN DISTRICT LOCAL RULE 23-2

FOR JUDICIAL NOTICE AND SUPPLEMENTAL SUBMISSION OF AUTHORITY IN OPPOSITION TO DEFENDANTS'

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

The Court may take judicial notice and consider the language and legislative history of a

Sept. 25, 1996), aff'd, 146 F.3d 1177 (9th Cir.

6 . ORDER RE APPOINTMENT OF LEAD PLAINTIFF

EXTRACTED KEY WORDS

MAYFIELD PLAINTIFFS
COUNSEL
LEAD PLAINTIFFS
APPOINT
MOTION
COURT
PRESUMPTION
FRAZIER
SECURITIES
LOSSES
ACT
MURRAY
THOMAS
ADEQUATE
SECURITIES LITIGATION
PARTIES
PURSUANT
HUH
INSTITUTIONAL INVESTORS
RELIEF
SIROTA
HILLEL
FELLER
MICHAEL
MAXWELL
HAROLD
PLAN
TRUSTEE
DEFENDANTS

                                       R E C E I V F D                         ORIGINAL





       In  re  DIAMOND  MULTIMEDIA 1                           NO.  C  96-2644 SBA
       SYSTE?lS,  INC.,  SECURITIES
       LITIGATION                            1                 ORDER  RE APPOINTMENT OF
                                             1                 LEAD PLAINTIFF AND  LEAD
                                             1                 COUNSEL
       This  Document  Relates  to           1 1               CONSOLIDATED  ACTION
             ALL ACTIONS                     1
10
11                                                   I.
12           Plaintiff  Larry  Frazier
                                              filed a securities  fraud.  class
13     action  complaint  styled  as  Frazier
                                                            v .   Diamond  Multimedia

14     Svstems. et al.,  C 96-2644 SBA  in  this  Court  on  July
                                                                                        2 4 ,  

15     against  defendants  Diamond  Multimedia  Systems,  Inc.,  William
16     J. Schroeder,  Chong-Moon  Lee,  Gary
                                                            B.  Filler  and  Hyung  Hwe
17     Huh.  On  October 2, 1996, plaintiffs  Norman  Mayfield;  Thomas
18     E.  Murray;  Thomas  E.  Murray,  Trustee,  Thomas
                                                                             E. Murray  Pension
19     Plan;  Harold J. Maxwell;  Michael J. Feller;  and  Hillel  and
20
21     another  securities  fraud  class  action  in  this  Court,  pavfield.
22     et  al.. v.  Hvuns Hwe  Huh.  et  al.,
                                                            C 96-3582 SBA,  against  the
23     same  group of defendants.'  The  Court  granted  the  Mayfield
24     plaintiffs'  unopposed  motion  to  consolidate  these  actions
                                                                                                on
25     January 9 ,   1997.
26           .  Prior to the  federal  actions,  Milberg miss filed a
27     state  court  action  against  the  above  defendants  basec
                                                                                         on
       California  securities  laws.  pass V.  Huh,.  Santa  Clara  County
28  -Super. Ct. No.  CV758927.


                                            Exhibit  7

SNIPPETS:

15 against defendants Diamond Multimedia Systems, Inc., William

On October 2, 1996, plaintiffs Norman Mayfield; Thomas

18 E. Murray;

21 another securities fraud class action in this Court,

Hvuns Hwe Huh.

Mayfield plaintiffs' Motion to Be Appointed Lead Plaintiffs

Pursuant to 0 21Dof the Securities Exchange Act

Frazier's Motion to:

Plaintiff; Appoint Sirota & Sirota Lead Counsel;

All parties appeared through counsel.

The presumption favors the Mayfield plaintiffs.

Frazier does not disagree that the Mayfield plaintiffs collectively suffered greater losses,

are presumptively the most adequate lead plaintiffs.

While legislative history mention6 the goal of increasing the involvement of institutional

- in the state court class action is coextensive with the relief

10 E. Murray, Trustee, Thomas E. Murray Pension Plan; Harold

11 Maxwell; Michael J. Feller; and Hillel and Edna Shohet are

7 . MEMO IN OPPOSITION TO MOTION TO DISMISS AMENDED CONSOLIDATED COMPLAINT

EXTRACTED KEY WORDS

COMPLAINT
DIAMOND
PLAINTIFFS
SECURITIES
COURT
ALLEGATIONS
CLASS ACTION COMPLAINT
MOTION
BLACKMAN
STANDARD
INVENTORY
SAN DIEGO
CIR
MISREPRESENTATIONS
MISLEADING
AMENDED CONSOLIDATED CLASS
FINANCIAL STATEMENTS
LERACH LLP
SECURITIES LITIGATION
UNITED STATES
PSLRA
COMPLAINT PROPERLY PLEADS
SECOND CIRCUIT
OPPORTUNITY TEST
SILICON GRAPHICS
CONFERENCE REPORT
ACCOUNTING
INDIVIDUAL DEFENDANTS
CALIFORNIA

   MILBERG WEISS BERSHAD
   HYNES & LERACH LLP
   ALAN SCHULMAN (128661)
   MARK SOLOMON (151949)
   SALLIE A. BLACKMAN (141830)
   600 West Broadway, Suite 1800
   San Diego, CA 92101
   Telephone: 619/231-1058

   - and -

   JOHN K. GRANT (169813)
   222 Kearny Street, 10th Floor
   San Francisco, CA 94108
   Telephone: 415/288-4545

   ABBEY, GARDY & SQUITIERI, LLP
   JILL S. ABRAMS
   JAMES J. SEIRMARCO
   212 East 39th Street
   New York, NY 10016
   Telephone: 212/889-3700

   BERNSTEIN LITOWITZ BERGER &
   GROSSMANN LLP
   DANIEL L. BERGER
   JEFFREY N. LEIBELL
   1285 Avenue of the Americas
   33rd Floor
   New York, NY 10019
   Telephone: 212/554-1400

   Attorneys for Lead Plaintiffs and the Class

                        UNITED STATES DISTRICT COURT

                      NORTHERN DISTRICT OF CALIFORNIA

                              OAKLAND DIVISION



   In re DIAMOND MULTIMEDIA SYSTEMS,
   INC. SECURITIES LITIGATION

   ___________________________________

   This Document Relates to:

SNIPPETS:

San Diego, CA 92101 Telephone:

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

INC. SECURITIES LITIGATION

PLAINTIFFS' MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DIAMOND DEFENDANTS' MOTION

ALLEGATIONS OF THE COMPLAINT

Diamond's Materially False And Misleading Financial Statements

Defendants Failed Adequately To Reserve For Obsolete And Excess Inventory

Misrepresentations Respecting Diamond's Key Products And Business Prospects

The PSLRA Did Not Jettison Recklessness Or "Motive And Opportunity" As Means To Plead Scienter

The Complaint Properly Pleads False Statements To Analysts

It details a scheme perpetrated by Diamond and the Individual Defendants to drive Diamond's

Notwithstanding those responsibilities, however, the Individual Defendants caused Diamond to

The Private Securities Litigation Reform Act's information and belief pleading requirements,

F.3d 1493, 1503 (9th Cir.

The Complaint satisfies the Ninth Circuit's and the PSLRA's information and belief pleading

And nothing in that text suggests that it overrules Second Circuit case law including the

That determination is on all fours with the position expressed by the Securities and Exchange

SEC Brief at 8 (Blackman Decl.,

However, what the Conference Report actually says, and what the Chantal court recognized, is

MILBERG WEISS BERSHAD HYNES & LERACH LLP ALAN SCHULMAN MARK SOLOMON SALLIE A. BLACKMAN

TO DISMISS AMENDED CONSOLIDATED CLASS ACTION COMPLAINT by depositing a true copy thereof in a

8 . MEMO IN OPPOSITION MOTION TO DISMISS

EXTRACTED KEY WORDS

PLAINTIFFS
DEFENDANTS
FACTS
DIAMOND
SECURITIES
UNITED STATES
LEE
STANDARD
MOTION
SECOND CIRCUIT
DISMISS
FRAUDULENT
CIR
BLACKMAN
LIABILITY
RECKLESSNESS
LERACH LLP
PLEADING STANDARD
OPPOSITION
SECURITIES LITIGATION
CONFERENCE COMMITTEE
LEGISLATIVE HISTORY
DISTRICT COURT
STOCK SALES
CONFERENCE REPORT
MISLEADING STATEMENTS
SENATOR DODD
CHONG-MOON
CALIFORNIA


   MILBERG WEISS BERSHAD
   HYNES & LERACH LLP
   ALAN SCHULMAN (128661)
   MARK SOLOMON (151949)
   SALLIE A. BLACKMAN (141830)
   600 West Broadway, Suite 1800
   San Diego, CA 92101
   Telephone: 619/231-1058

   - and -

   JOHN K. GRANT (169813)
   222 Kearny Street, 10th Floor
   San Francisco, CA 94108
   Telephone: 415/288-4545
   ABBEY, GARDY & SQUITIERI, LLP
   JILL S. ABRAMS
   JAMES J. SEIRMARCO
   212 East 39th Street
   New York, NY 10016
   Telephone: 212/889-3700

   BERNSTEIN LITOWITZ BERGER &
   GROSSMANN LLP
   DANIEL L. BERGER
   JEFFREY N. LEIBELL
   1285 Avenue of the Americas
   33rd Floor
   New York, NY 10019
   Telephone: 212/554-1400

   Attorneys for Lead Plaintiffs and the Class


                        UNITED STATES DISTRICT COURT

                      NORTHERN DISTRICT OF CALIFORNIA

                              OAKLAND DIVISION



   In re DIAMOND MULTIMEDIA SYSTEMS,
   INC. SECURITIES LITIGATION

   ___________________________________

SNIPPETS:

MILBERG WEISS BERSHAD HYNES & LERACH LLP ALAN SCHULMAN MARK SOLOMON SALLIE A. BLACKMAN

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

In re DIAMOND MULTIMEDIA SYSTEMS,

PLAINTIFFS' MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT CHONG-MOON LEE'S

Lee's Fraudulent Conduct

The Facts Alleged Show That Lee Was Privy To Material Nonpublic Information When He Sold

E. Recklessness Liability Has Not Been Eliminated For Non-Forward-Looking Statements

Congress Preserved The Existing Recklessness Standard In Private Securities Litigation Reform

The Legislative History Shows That Congress Intended For Courts To Seek Guidance From Second

As discussed more fully in Plaintiffs' opposition to the Diamond defendants' motion to

McCormick v. Fund American Cos., 26 F.3d 869, 876 (9th Cir.

In Kaplan, the Ninth Circuit held that a violation of §10could be found because insiders'

Judge Kovachevich of the Florida District Court reaffirmed that the Second Circuit's "motive

The legislative history directly contradicts defendants' assertion that the Conference

The Conference Report (Blackman Decl.,

When Senator Specter asked if the Conference Report repudiated 2nd Circuit case law, Senator

9 . FURTHER STATEMENT OF RECENT DECISIONS

EXTRACTED KEY WORDS

RECKLESSNESS
PLEADING
DEFENDANTS
PLAINTIFFS
SCIENTER
ADEQUACY
FACTS
CONGRESS
STANDARDS
EXHIBIT
CIRCUIT
REFORM ACT
BESPEAKS CAUTION
FRAUD
DISMISS
SECURITIES
BESPEAKS CAUTION DOCTRINE
COMMIT FRAUD
INFERENCE
SAN FRANCISCO
LLP
PSLRA
LANGUAGE
CIRCUMSTANTIAL EVIDENCE
ALLEGE
COMPLAINT
ALLEGING
ALLEGATIONS
STATUTE

   MILBERG WEISS BERSHAD

   HYNES & LERACH LLP

   ALAN SCHULMAN (128661)

   MARK SOLOMON (151949)

   600 West Broadway, Suite 1800

   San Diego, CA 92101

   Telephone: 619/231-1058

   - and -

   JOHN K. GRANT (169813)

   KIMBERLY C. EPSTEIN (169012)

   222 Kearny Street, 10th Floor

   San Francisco, CA 94108

   Telephone: 415/288-4545

   ABBEY, GARDY & SQUITIERI, LLP

   JILL S. ABRAMS

   JAMES J. SEIRMARCO (194307)

   212 East 39th Street

   New York, NY 10016

   Telephone: 212/889-3700

   BERNSTEIN LITOWITZ BERGER &

   GROSSMANN LLP

   DANIEL L. BERGER

   JEFFREY N. LEIBELL

   1285 Avenue of the Americas

SNIPPETS:

San Francisco, CA 94108

ABBEY, GARDY & SQUITIERI, LLP

PLAINTIFFS' FURTHER STATEMENT OF RECENT DECISIONS

OPPOSITION TO DEFENDANTS' MOTIONS TO DISMISS

In Lister, the court addressed the requirement of alleging a strong inference of scienter

To adequately plead scienter under the Reform Act, for false statements that are not forward

Exhibit B: In re Boeing Sec. Litig.,

the court addressed the application of the bespeaks caution doctrine and the adequacy of

In addition, the Ninth Circuit has held that courts may dismiss claims based on the "bespeaks

This Court, having considered the statutory language itself, the legislative history of the

There is nothing in the legislative history to suggest that Congress intended to eliminate

Zuckerman, 4 F.Supp.2d at 622 (citing In re Silicon Graphics, Inc. Securities Litigation, 970

The Court concludes, as did the Zuckerman and STI Classic Fund courts in this Circuit, that

When Congress wishes to supplant a well-established, judicially-created rule it knows how to

10 . DECLARATION OF SALLIE A

EXTRACTED KEY WORDS

DECLARATION
CALIFORNIA
SAN DIEGO
DEFENDANTS
UNITED STATES
CLASS ACTION
DIAMOND MULTIMEDIA SYSTEMS
BLACKMAN
SALLIE
COMPLAINT
DISMISS
MOTIONS
PLAINTIFFS
LLP
REPORT
LEXIS
LAW
MEMORANDUM
SESS
CONG
LITIG
TEX
BOLLINGER INDUS
STI CLASSIC FUND
JUDGE
DAMAGES
SUPER
HABIB
OPPOSITION


   MILBERG WEISS BERSHAD
   HYNES & LERACH LLP
   ALAN SCHULMAN (128661)
   MARK SOLOMON (151949)
   SALLIE A. BLACKMAN (141830)
   600 West Broadway, Suite 1800
   San Diego, CA 92101
   Telephone: 619/231-1058

   - and -
   JOHN K. GRANT (169813)
   222 Kearny Street, 10th Floor
   San Francisco, CA 94108
   Telephone: 415/288-4545

   ABBEY, GARDY & SQUITIERI, LLP
   JILL S. ABRAMS
   JAMES J. SEIRMARCO
   212 East 39th Street
   New York, NY 10016
   Telephone: 212/889-3700

   BERNSTEIN LITOWITZ BERGER &
   GROSSMANN LLP
   DANIEL L. BERGER
   JEFFREY N. LEIBELL
   1285 Avenue of the Americas
   33rd Floor
   New York, NY 10019
   Telephone: 212/554-1400

   Attorneys for Lead Plaintiffs and the Class


                        UNITED STATES DISTRICT COURT

                      NORTHERN DISTRICT OF CALIFORNIA

                              OAKLAND DIVISION



   In re DIAMOND MULTIMEDIA SYSTEMS,
   INC. SECURITIES LITIGATION

   ___________________________________

SNIPPETS:

MILBERG WEISS BERSHAD HYNES & LERACH LLP ALAN SCHULMAN MARK SOLOMON SALLIE A. BLACKMAN

Attorneys for Lead Plaintiffs and the Class

UNITED STATES DISTRICT COURT

In re DIAMOND MULTIMEDIA SYSTEMS,

DECLARATION OF SALLIE A. BLACKMAN IN SUPPORT OF PLAINTIFFS' MEMORANDUM OF POINTS AND

I am an attorney licensed to practice law in the State of California.

I am an associate in the law firm of Milberg Weiss Bershad Hynes & Lerach LLP, one of the

I have personal knowledge of the facts stated in this declaration and, if called as a

Habib v. Diamond Multimedia Systems, Inc., Case No. CV754787 (Super.

of S.C. June 4, 1996), Verified First Amended Complaint for Damages.

Exhibit 2: Fischler v. AmSouth Bancorporation, Case No. 96-1567-CIV-T-17A, 1996 U.S. Dist.

"Report and Recommendation of United States Magistrate Judge" in STI Classic Fund v.

Tex.

LEXIS 767 (N.D.

SEC, Amicus Curiae, Concerning Defendants' Motion to Dismiss the Amended Complaint, In re

Sec. Litig., No. C-96-0393-FMS (N.D.

Senate Report No. 104-98, 104th Cong., 1st Sess.

Executed this 7th day of April, 1997, at San Diego, California.

11 . DECLARATION OF JOHN K

EXTRACTED KEY WORDS

EXHIBIT
CALIFORNIA
SAN FRANCISCO
SUPPORT
ADDRESSING
JOHN
UNITED STATES
GRANT
PLAINTIFFS
LLP
DISMISS
MOTIONS
DEFENDANTS
OPPOSITIONS
AUTHORITIES
SUBMISSION ADDRESSING
FOREGOING
PERJURY
PENALTY
COMPETENTLY TESTIFY THERETO
LAW
SECURITIES LITIGATION
COURT
DISTRICT
FLOOR
BERGER
YORK
LERACH LLP
HYNES


   MILBERG WEISS BERSHAD
     HYNES & LERACH LLP
   ALAN SCHULMAN (128661)
   MARK SOLOMON (151949)
   SALLIE A. BLACKMAN (141830)
   600 West Broadway, Suite 1800
   San Diego, CA 92101
   Telephone: 619/231-1058
        - and -
   JOHN K. GRANT (169813)
   222 Kearny Street, 10th Floor
   San Francisco, CA 94108
   Telephone: 415/288-4545

   ABBEY, GARDY & SQUITIERI, LLP
   JILL S. ABRAMS
   JAMES J. SEIRMARCO
   212 East 39th Street
   New York, NY 10016
   Telephone: 212/889-3700

   BERNSTEIN LITOWITZ BERGER &
     GROSSMANN LLP
   DANIEL L. BERGER
   JEFFREY N. LEIBELL
   1285 Avenue of the Americas
   33rd Floor
   New York, NY 10019
   Telephone: 212/554-1400


                        UNITED STATES DISTRICT COURT

                      NORTHERN DISTRICT OF CALIFORNIA

                              OAKLAND DIVISION



   In re DIAMOND MULTIMEDIA SYSTEMS,
   INC. SECURITIES LITIGATION

   ______________________________________

   This Document Relates to:
   ALL ACTIONS.

SNIPPETS:

MILBERG WEISS BERSHAD HYNES & LERACH LLP ALAN SCHULMAN MARK SOLOMON SALLIE A. BLACKMAN

New York, NY 10016 Telephone:

BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP DANIEL L. BERGER JEFFREY N. LEIBELL

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

DECLARATION OF JOHN K. GRANT IN SUPPORT OF SUBMISSION ADDRESSING RECENT AUTHORITIES IN

I am a member of the Bar of the State of California and am qualified to appear before this

I am associated with the law firm of Milberg Weiss Bershad Hynes & Lerach LLP, one of

I submit this Declaration in support of Submission Addressing Recent Authorities in Further

Oppositions to Defendants' Motions to Dismiss.

Except as noted, I have personal knowledge of the facts set forth in this Declaration and, if

Exhibit A: Fugman v. Aprogenex,

In re Silicon Graphics, Inc. Securities Litigation, No. C96-0393 FMS (N.D.

I declare under penalty of perjury under the laws of the State of California that the

Executed this 6th day of June, 1997, at San Francisco, California.

That declarant is and was, at all times herein mentioned, a citizen of the United States and

12 . COMPLAINT

EXTRACTED KEY WORDS

DEFENDANTS
MINING
AGER
NEVADA
ALEXANDER
PLAINTIFFS
JOSH PROJECT
SECURITIES
DELGRATIA STOCK
GOLD
UNITED STATES
SHARES
LAVARACK
EXCHANGE ACT
CACTUS MINING
CLASS PERIOD
FINANCIAL STATEMENTS
MISLEADING
EXPLORATION
DELGRATIA MINING CORPORATION
MITCHELL NAFICY
MARK ALBRIGHT
NGC
GOLD RESERVES
GEOLOGICAL RESOURCES
DRILL HOLES
MINING PROPERTIES
DISCLOSURES
INTERNAL CORPORATE DOCUMENTS


   ALBRIGHT, STODDARD, WARNICK
     & ALBRIGHT
   G. MARK ALBRIGHT (NV #001394)
   WILLIAM H. STODDARD (NV #001477)
   801 South Rancho Drive
   Quail Park Suite D-4
   Las Vegas, NV 89106
   Telephone: 702/384-7111

   MILBERG WEISS BERSHAD
     HYNES & LERACH LLP
   WILLIAM S. LERACH
   DARREN J. ROBBINS
   600 West Broadway, Suite 1800
   San Diego, CA 92101
   Telephone: 619/231-1058

   WOLF HALDENSTEIN ADLER
     FREEMAN & HERZ, LLP
   FRANCIS M. GREGOREK
   BETSY C. MANIFOLD
   600 West Broadway, Suite 1800
   San Diego, CA 92101
   Telephone: 619/338-4599

   Attorneys for Plaintiffs

   (Additional counsel appear on signature page.)

                        UNITED STATES DISTRICT COURT

                             DISTRICT OF NEVADA


   K. MITCHELL NAFICY and SAM NAFICY,
   On Behalf of Themselves and All
   others Similarly Situated,

                  Plaintiffs,

        vs.

   DELGRATIA MINING CORPORATION, J.
   TERRENCE ALEXANDER, CHARLES A.
   AGER, ERIC X. LAVARACK, GEOFF
   COURTNALL, PATRICK J. FURLONG and
   DAVID R. MANNING,

SNIPPETS:

Attorneys for Plaintiffs

COMPLAINT FOR VIOLATION OF THE SECURITIES EXCHANGE ACT OF 1934

This is a class action on behalf of purchasers of the common stock of Delgratia Mining

This action alleges that defendants made false and misleading statements about Delgratia's

For example, Delgratia falsely reported that its Nevada gold project contained 5 million

The defendants, which include both current and former officers and directors of the Company,

Defendants further agreed to pay $5 million in exploration and development costs for the

During the Class Period, defendants disclosed certain assay results purportedly from the

However, defendants knew but failed to disclose that the assay results were not conducted by

Defendants concealed the truth about the Nevada gold project in order to allow various

Defendants Eric Lavarack and David Manning also sold some 20,000 shares of their Delgratia

Delgratia is a mining company that acquires properties in the United States and Latin America

The Company's value was and is dependent on the successful definition of geological resources

At the same time Alexander was selling large, cheap blocks of Arakis stock to offshore

Therefore, Alexander enlisted the aid of a long-time business associate, defendant Charles

NGC owned all the shares of Valley Gold Corporation,

Furthermore, exploration and development of the Josh Project was to be conducted by Cactus

Plaintiff K. Mitchell Naficy purchased 150 shares of Delgratia common stock on March 17, 1997

Because of defendant Alexander's positions with the Company, he knew the adverse non-public and committees thereof, and via reports and other information provided to him in connection

When the assay results from drill holes on the Josh Project were received, the Individual

On February 27, 1997, Delgratia filed a Report on Form 6-K with the SEC in which it reported

ALBRIGHT, STODDARD, WARNICK & ALBRIGHT G. MARK ALBRIGHT WILLIAM H. STODDARD

13 . BRIEF OF THE SECURITIES INDUSTRY ASSOCIATION

EXTRACTED KEY WORDS

CALIFORNIA
PLAINTIFFS
COURT
LAW
STATUTE
COMMERCE CLAUSE
SUPREME COURT
ACT
MARKET
CLASS ACTIONS
CONSTRUCTION
NATIONWIDE
SECURITIES INDUSTRY ASSOCIATION
CALIFORNIA INVESTORS
TRANSACTIONS
SUPERIOR COURT
COUNTY SUPERIOR COURT
DEFENDANTS
LEGISLATIVE HISTORY
NATIONAL VENTURE
INTERSTATE COMMERCE
NON-CALIFORNIA
CONSTITUTION
LEGISLATURE
UNITED STATES
REFORM ACT
TERRITORIAL LIMITATIONS
CSB
PETITIONERS



                                *No. S058723

    ===================================================================

                     IN THE SUPREME COURT OF CALIFORNIA

    ===================================================================

 DIAMOND MULTIMEDIA SYSTEMS, INC., WILLIAM J. SCHROEDER, GARY B. FILLER and
                               HYUNG HWE HUH,

                        Defendants and Petitioners,

                                   - v. -

                     SANTA CLARA COUNTY SUPERIOR COURT,

                                Respondent.

                  ---------------------------------------

                            JOANNE PASS, et al.,

                  Plaintiffs and Real Parties In Interest

                  ---------------------------------------

     BRIEF OF THE SECURITIES INDUSTRY ASSOCIATION, THE NATIONAL VENTURE
     CAPITAL ASSOCIATION AND THE AMERICAN ELECTRONICS ASSOCIATION AMICI
                      CURIAE IN SUPPORT OF PETITIONERS

   After an Order by the Court of Appeal, Sixth Appellate District, Case
   No. H016376, Denying Petition for Writ of Mandate From an Order of the
    Santa Clara County Superior Court, Case Nos. CV758927, CV759012 and
                          CV759270 (Consolidated)
                  ---------------------------------------

   BROBECK, PHLEGER & HARRISON LLP
   TOWER C. SNOW, JR. (CSB No. 58342)
   ROBERT P. VARIAN (CSB No. 107459)
   JOHN B. MISSING (CSB No. 106044)
   SARA B. BRODY (CSB No. 130222)
   PATRICK THOMAS MURPHY (CSB No. 178189)
   RACHAEL E. MENY (CSB No. 178514)
   One Market, Spear St. Tower
   San Francisco, California 94105

SNIPPETS:

IN THE SUPREME COURT OF CALIFORNIA

BRIEF OF THE SECURITIES INDUSTRY ASSOCIATION, THE NATIONAL VENTURE CAPITAL ASSOCIATION AND

CURIAE IN SUPPORT OF PETITIONERS

After an Order by the Court of Appeal, Sixth Appellate District, Case No. H016376, Denying

(CSB No. 58342)

The Language Chosen by the Drafters in Adapting Section 25400 from Section 9of the Securities

Historical Circumstances and Legislative History of Section 25400 Demonstrate That It Was Not

The Legislative History Demonstrates that Section 25400 Was Drafted to Avoid Duplication of

Intended to Protect California Investors by Regulating Sales of Securities in California's

Plaintiffs' Construction of Section 25400 Contravenes Nearly Thirty Years of Settled Practice

Plaintiffs' Construction of Section 25400 Would Upset the Policy Balance Struck in 1968 and

Plaintiffs' Construction Violates the Commerce Clause by Allowing California to Directly

E. Because Nationwide Application of Section 25400 Prohibits Conduct the Reform Act

The 1934 Act's Preemption of Inconsistent State Laws Is Firmly Established in the Decisions

United States Constitution Amendment 14,

These cases purport to include as plaintiffs many thousands of non-California investors

The ruling in this case is thus critical to the citizens of California, whose overburdened

For the compelling legal, constitutional and policy reasons presented herewith, the SIA, NVCA

The position advocated by Plaintiffs would contravene the language, purpose and legislative

It shall be unlawful for any person, directly or indirectly, by the use of the mails or any

This argument fails for the simple reason that, as Defendants note in their Reply Memorandum

15 . MOTION FOR VOLUNTARY DISMISSAL

EXTRACTED KEY WORDS

DISMISS
PLAINTIFFS
DEFENDANTS
CALIFORNIA
PREJUDICE
MOTION
ABSENT CLASS MEMBERS
COMPLAINT
FILING
NATIONWIDE RELIEF
SAN FRANCISCO
LLP
DISCOVERY
SUPERIOR COURT
SANTA CLARA
DISTRICT
HUH
SECURITIES
LAW
SUPREME COURT
THEREOF
VOLUNTARY DISMISSALS
UNITED STATES
LEAD PLAINTIFFS
COMPROMISE
DIRECTS
DEMURRER
LITIGATION
COUNSEL

   MILBERG WEISS BERSHAD
   HYNES & LERACH LLP
   ALAN SCHULMAN (128661)
   MARK SOLOMON (151949)
   600 West Broadway, Suite 1800
   San Diego, CA 92101
   Telephone: 619/231-1058
       - and -
   JOHN K. GRANT (169813)
   KIMBERLY C. EPSTEIN (169012)
   222 Kearny Street, 10th Floor
   San Francisco, CA 94108
   Telephone: 415/288-4545

   ABBEY, GARDY & SQUITIERI, LLP
   JILL S. ABRAMS
   JAMES J. SEIRMARCO (194307)
   212 East 39th Street
   New York, NY 10016
   Telephone: 212/889-3700

   BERNSTEIN LITOWITZ BERGER &
   GROSSMANN LLP
   DANIEL L. BERGER
   JEFFREY N. LEIBELL
   1285 Avenue of the Americas
   33rd Floor
   New York, NY 10019
   Telephone: 212/554-1400

   Attorneys for Lead Plaintiffs and the Class


                        UNITED STATES DISTRICT COURT

                      NORTHERN DISTRICT OF CALIFORNIA

                              OAKLAND DIVISION

   In re DIAMOND MULTIMEDIA SYSTEMS,  )    No. C-96-2644-SBA
   INC. SECURITIES LITIGATION         )
   ___________________________________)    CLASS ACTION

                                      )
   This Document Relates to:          )    DATE: June 8, 1999
                                      )    TIME: 11:30 a.m.
   ALL ACTIONS.                       )    CTRM: Honorable Saundra
   ___________________________________)    Brown Armstrong

SNIPPETS:

MILBERG WEISS BERSHAD HYNES & LERACH LLP ALAN SCHULMAN MARK SOLOMON

San Francisco, CA 94108 Telephone:

Attorneys for Lead Plaintiffs and the Class

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

PLAINTIFFS' NOTICE OF MOTION AND MOTION FOR

VOLUNTARY DISMISSAL OF ACTION AND MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF

ALL PARTIES AND THEIR COUNSEL OF RECORD

PLEASE TAKE NOTICE that on June 8, 1999 at 11:30 a.m. before the Honorable Saundra Brown

From the very beginning of this action, plaintiffs have repeatedly advised defendants and

The Court concurs that Milberg Weiss' desire to avoid duplicative litigation, if possible, is

Plaintiffs filed this federal court action for two simple reasons: after the filing of the

Accordingly, plaintiffs now seek an order approving plaintiffs' voluntary dismissal of this

In addition, the state court complaint is now at issue, having survived defendants' demurrer,

All defendants have answered the state court complaint; a nationwide class has been

the state court action has resulted in several California Court of Appeals rulings and a

Defendants' unwillingness to dismiss this action, notwithstanding the obvious logic of such

Prior to the filing of any federal action, plaintiffs filed an action against these

With respect to voluntary dismissals,

A class action shall not be dismissed or compromised without the approval of the court, and

The purpose of Rule 23, however, is not to protect the interests of defendants, but rather to

16 . CIVIL DOCKET FOR CASE 96-CV-2644

EXTRACTED KEY WORDS

ENTRY
CLASS ACTION
COUNSEL
PLAINTIFF LARRY FRAZIER
CLASS ACTION COMPLAINT
DEFENDANT
ARMSTRONG
JUDGE SAUNDRA
DIAMOND MULTIMEDIA
MOTION
MANAGEMENT
MANAGEMENT CONFERENCE
DISMISS
LEAD PLAINTIFFS
CONSOLIDATED CLASS
SECURITIES EXCHANGE ACT
MEMORANDUM
AMENDED CONSOLIDATED CLASS
DEFENDANT CHONG-MOON
DEFENDANT WILLIAM
DECLARATION
HYUNG HWE HUH
NOTICE SET
CHONG-MOON LEE
CLASS CERTIFICATION
OPPOSITION
PROPOSED ORDER
MAYFIELD PLAINTIFFS
APPOINT LARRY FRAZIER


Docket as of March 17, 1999 (retrieved 4/1/99)

Proceedings include all events.                                          CONSOL
4:96cv2644 Frazier v. Diamond Multimedia, et al

                                                            CONSOL
                       U.S. District Court
 U.S. District for the Northern District of California (Oakland)

               CIVIL DOCKET FOR CASE #: 96-CV-2644

Frazier v. Diamond Multimedia, et al                        Filed: 07/24/96
Assigned to: Judge Saundra Brown Armstrong   Jury demand: Both
Demand: $0,000                               Nature of Suit:  850
Lead Docket: None                            Jurisdiction: Federal Question
Dkt# in other court: None

Cause: 15:78m(a) Securities Exchange Act

(Party and Counsel List)


7/24/96  1       COMPLAINT  Summons(es) issued; Fee status pd entered on
                 7/24/96  in the amount of $ 120.00 ( Receipt No. 122712);
                 jury demand    (4:96-cv-02644) (kk) (Entry date 07/26/96)
                 (4:96cv2644)

7/24/96  2       ORDER RE COURT PROCEDURE and SCHEDULE  by Judge Saundra B.
                 Armstrong : Proof of service to be filed by 9/9/96 ;
                 counsels' case management statement to be filed by 11/25/96
                 ; initial case management conference will be held 3:00
                 12/4/96 .  (cc: all counsel) (kk) (Entry date 07/26/96)
                 (4:96cv2644)

7/30/96  3       NOTICE by Plaintiff Larry Frazier Sr. of original signature
                 page to class action complaint  (4:96-cv-02644) (bt)
                 (4:96cv2644)

8/26/96  4       RETURN OF SERVICE on summons and complaint and related
                 documents executed upon defendant Diamond Multimedia  on
                 8/1/96   (4:96-cv-02644) (cg) (4:96cv2644)

8/26/96  5       RETURN OF SERVICE on summons and complaint and related
                 documents executed upon defendant Gary B. Filler on 8/21/96
                   (4:96-cv-02644) (cg) (4:96cv2644)

8/26/96  6       RETURN OF SERVICE on summons and complaint and related

SNIPPETS:

Assigned to: Judge Saundra Brown Armstrong Jury demand: Both

Cause: 15:78mSecurities Exchange Act

(Party and Counsel List)

jury demand (Entry date 07/26/96)

counsels' case management statement to be filed by 11/25/96

7/30/96 3 NOTICE by Plaintiff Larry Frazier Sr.

documents executed upon defendant Diamond Multimedia on

Multimedia, defendant William J. Schroeder, defendant

Chong-Moon Lee, defendant Gary B. Filler, defendant Hyung

1996 to answer or otherwise respond to plaintiff

Larry Frazier, Sr.'s Class Action Complaint.

act of 1934 and for appointment of lead plaintiffs' co-lead

counsel with Notice set for November 19,

10/4/96 10 MOTION before Judge Saundra B. Armstrong by Plaintiff

Chong-Moon Lee to dismiss the class action complaint with

10/7/96 14 REQUEST by defendant Chong-Moon Lee for judicial notice

defendant Hyung Hwe Huh re motion to dismiss class action

plaintiff's notice of motion and to appoint Larry Frazier

11/12/96 30 MEMORANDUM by Plaintiff Larry Frazier Sr.

in opposition to to the Mayfield plaintiffs' motion to be

1/2/97 47 CLERK'S NOTICE Case Management Conference continued to

1/31/97 60 Joint CASE MANAGEMENT STATEMENT and PROPOSED ORDER filed.

4:96-cv-02644 to dismiss amended consolidated class action

management conference regarding class certification.

17 . OPINION

EXTRACTED KEY WORDS

CALIFORNIA
LAW
COURT
MARKET MANIPULATION
PURCHASE
SALE
TRANSACTIONS
DIAMOND MULTIMEDIA
CORPORATE SECURITIES LAW
UNLAWFUL
PRICE
CIVIL
ACT
PURPOSE
STOCK
CLASS ACTION
DEFENDANTS
PETITIONERS
CORPORATIONS CODE
PLAINTIFFS
SUBDIVISION
SECURITIES LITIGATION
REAL PARTIES
SUPERIOR COURT
REFORM ACT
PROVISIONS
PURCHASERS
SUPREME COURT
LEGISLATURE


                     IN THE SUPREME COURT OF CALIFORNIA


   DIAMOND MULTIMEDIA
   SYSTEMS, INC. et al.,

              Petitioners,

              v.

   SUPERIOR COURT OF
   SANTA CLARA COUNTY,

              Respondent;

   JOANNE PASS et al.,

              Real Parties in Interest.
   ____________________________________

   )
   )
   )
   )
   )
   )
   )
   )
   )
   )
   )
   )
   )
   )
   )
   )


                                  S058723
                            (filed Jan. 4, 1999)

                             Ct. App. 6 H016376

                             Santa Clara County
                         Super. Ct. Nos. CV758927,
                           CV759012 and CV759270

SNIPPETS:

IN THE SUPREME COURT OF CALIFORNIA

SUPERIOR COURT OF SANTA CLARA COUNTY,

Corporations Code section 25400, a part of the Corporate Securities Law of 1968,1 provides

The principal question in this mandamus action is whether that civil remedy is available to

The matter reached this court after the Court of Appeal summarily denied a petition for writ

Plaintiff Joanne Pass filed the underlying action as a class action on behalf of all

Plaintiffs would not have purchased the shares at the price paid or at all had they been

The dispute between defendants/petitioners and the real parties in interest centers on the

Our reference to civil remedies available under those provisions responded only to a claim

By doing so the Legislature incorporated the "in this state" limitation of section 25400.

Subdivision, under which this action has been filed, does not require that any transaction

"Any person who willfully participates in any act or transaction in violation of Section

12, ante), the Securities Litigation Uniform Standards Act of 1998 has no impact on this case.

It should be emphasized, however, that the class certification for the claims filed under the

It was not until after Congress passed the Private Securities Litigation Reform Act of 1995,

18 . CIVIL DOCKET FOR CASE 96-CV-3582

EXTRACTED KEY WORDS

PLAINTIFFS
DEFENDANT
LCC
JUDGE SAUNDRA
COURT
COUNSEL
ARMSTRONG
DISTRICT
DOCKET
SUTRO LLP
MADISON
PILLSBURY
ATTORNEY
DEFENDANT CHONG-MOON LEE
MMR
WAIVER
APPEARANCE
MANAGEMENT
DEMAND
JURY
CALIFORNIA
HUH
MAYFIELD
SAN FRANCISCO
MONTGOMERY STREET
SMOCK
ATTORNEY MORGAN
PALO ALTO
HANOVER STREET

Docket as of April 20, 1998 (retrieved 4/1/99)

Proceedings include all events.                                   M-ADR  RELATE
4:96cv3582    Mayfield, et al v. Huh, et al

                                                            M-ADR  RELATE
                       U.S. District Court
 U.S. District for the Northern District of California (Oakland)

               CIVIL DOCKET FOR CASE #: 96-CV-3582

Mayfield, et al v. Huh, et al                               Filed: 10/02/96
Assigned to: Judge Saundra Brown Armstrong   Jury demand: Plaintiff
Demand: $0,000                               Nature of Suit:  850
Lead Docket: 96-CV-2644                      Jurisdiction: Federal Question
Dkt# in other court: None

Cause: 15:78m(a) Securities Exchange Act

()


10/2/96  1       COMPLAINT Summons(es) issued; Fee status pd entered on
                 10/2/96 in the amount of $120.00 (Receipt No. 802489); jury
                 demand    (3:96-cv-03582) (lcc) (Entry date 10/03/96)
                 (4:96cv3582)

10/2/96  2       ORDER RE COURT PROCEDURE and SCHEDULE (ADR Pilot) by Judge
                 Fern M. Smith: Proof of service to be filed by 11/18/96;
                 counsels' case management statement to be filed by 1/28/97;
                 initial case management conference will be held 8:30
                 2/7/97. (cc: all counsel)    (3:96-cv-03582) (lcc)
                 (Entry date 10/03/96) (4:96cv3582)

10/2/96  3       NOTICE by Plaintiff of related case(s) 4:96-cv-2644 SBA
                 (3:96-cv-03582) (lcc) (Entry date 10/03/96) (4:96cv3582)

10/4/96  4       NOTICE by Plaintiffs of Entry of Appearance
                 (3:96-cv-03582) (lcc) (Entry date 10/08/96) (4:96cv3582)

10/18/96 5       NOTICE by Plaintiffs of Pendency of other action in
                 California Superior Court.  (3:96-cv-03582) (lcc)
                 (4:96cv3582)

10/18/96 6       ORDER  by Judge Saundra B. Armstrong  granting  related
                 case notice (3-1) Case reassigned   to Judge Saundra B.
                 Armstrong, relating cases;  4:96-cv-2644 with member
                 cases 3:96-cv-3582 ( Date Entered: 10/21/96) (cc:  all

SNIPPETS:

Docket as of April 20,

4:96cv3582 Mayfield, et al v. Huh, et al

U.S. District Court

U.S. District for the Northern District of California

Assigned to: Judge Saundra Brown Armstrong Jury demand: Plaintiff

demand (lcc) (Entry date 10/03/96)

counsels' case management statement to be filed by 1/28/97;

(cc: all counsel)

10/4/96 4 NOTICE by Plaintiffs of Entry of Appearance

10/28/96 7 WAIVER OF SERVICE by defendant in 4:96-cv-03582 served on

opposition to the Mayfield plaintiffs' motion to be

7-13 (mmr)

4/17/98 11 NOTICE by defendant Chong-Moon Lee in 4:96-cv-02644,

address for attorney Walter J. Robinson III,

Madison & Sutro LLP, 2550 Hanover Street, Palo Alto, CA.

for attorney Morgan R. Smock,

Pillsbury Madison & Sutro LLP, 235 Montgomery Street, PO

Box 7880, San Francisco, CA. 94120-7880, 983-6390

19 . ORDER

EXTRACTED KEY WORDS

REAL PARTIES
PETITIONERS
LITIGATION
SECURITIES
DIAMOND MULTIMEDIA SYSTEMS
CALIFORNIA
SUPERIOR COURT
IMP
RESPONDENT
OAK
RELIEF
SECURITIES FRAUD
LAW
PARTY
DISTRICT
CLASS ACTION
DISCOVERY
DEFENDANTS
APPELLATE
PLAINTIFFS
DISCRETION
CORPORATIONS CODE
OAK TECHNOLOGY
TRIAL COURT
SCHNEIDER
SANTA CLARA COUNTY
ALTERNATIVE WRIT
ORDER DENYING
FEDERAL FORUM



                                      NOT CERTIFIED FOR PUBLICATION
                                      (filed Aug. 14, 1997)


       IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                    SIXTH APPELLATE DISTRICT


OAK TECHNOLOGY, et al.,
                                           H016141
          Petitioners,
                                           (Santa Clara County
     vs.                                    Super.Ct.No. CV758510)

THE SUPERIOR COURT OF SANTA CLARA COUNTY,

          Respondent;

HOCHMAN, et al.,

          Real parties in interest.
________________________________________/

DIAMOND MULTIMEDIA SYSTEMS, INC., et al.,
                                           H016186
          Petitioners,
                                           (Santa Clara County
     vs.                                    Super.Ct.No. CV758927)

THE SUPERIOR COURT OF SANTA CLARA COUNTY,

          Respondent;

JOANNE PASS, etc.,

          Real party in interest.
________________________________________/

IMP, INC., et al.,
                                           H016281
          Petitioners,
                                           (Santa Clara County
     vs.                                    Super.Ct.No. CV760793)

THE SUPERIOR COURT OF SANTA CLARA COUNTY,

SNIPPETS:

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

Petitioners,

THE SUPERIOR COURT OF SANTA CLARA COUNTY,

Respondent;

Real parties in interest.

DIAMOND MULTIMEDIA SYSTEMS, INC., et al.,

Real party in interest.

Defendants in three civil actions for securities fraud seek

an alternative writ of mandate be

OAK TECHNOLOGY, INC.

The same law firm represents real parties in interest in each case.

The action, however, has not yet been certified to proceed as a class action.

in the Diamond and Imp cases neither the state nor the federal class actions have been

action rest upon corporations Code section 25400 (prohibiting

Petitioners contend that real parties in interest purposely avoided pleading state law

decision in Schneider mandated a stay.

claims afford broader relief.

There is no requirement that a trial court articulate reasons for discretionary rulings.

And an appellate court reviews the action of the lower court,

Securities fraud plaintiffs and their attorneys have seized upon

securities fraud and to provide for a discovery stay while the

the California court has the discretion but

claim that the federal forum is better

the plaintiffs appealed from an order denying

20 . REPLY MEMORANDUM IN SUPPORT MOTION TO DISMISS

EXTRACTED KEY WORDS

LEE
SECURITIES LITIGATION
DEFENDANT
SPECIAL RELATIONSHIP
COMPLAINT
ALLEGATIONS
FAIL
DIAMOND
PARTICIPATION
LAW
DISTRICT
ALLEGATIONS SHOWING
CIRCUIT
FRAUD
MOTION
ADVERSE INFORMATION
CONTROLLING
SAN FRANCISCO
BOILERPLATE ALLEGATION
REJECTING
CALIFORNIA
UNITED STATES
CHONG-MOON LEE
TRANSFER BINDER
CCH
INFERENCE
ADEQUATE PARTICULARITY
CONSOLIDATED CLASS ACTION
SUTRO LLP


   PILLSBURY MADISON & SUTRO LLP
   WALTER J. ROBINSON III #40632
   MORGAN R. SMOCK #148212
   225 Bush Street
   Post Office Box 7880
   San Francisco, CA 94120-7880
   Telephone: (415) 983-1000

   Attorneys for Defendant
   CHONG-MOON LEE



                        UNITED STATES DISTRICT COURT

                      NORTHERN DISTRICT OF CALIFORNIA

                              OAKLAND DIVISION


   _________________________________________

   In re DIAMOND MULTIMEDIA SYSTEMS,
   INC. SECURITIES LITIGATION
   _________________________________________

   This Document Relates to:

        ALL ACTIONS.
   _________________________________________

   )
   )
   )
   )
   )
   )
   )
   )
   )



   No. C 96-2644-SBA

   Date: May 6, 1997
   Time: 2:00 p.m.

SNIPPETS:

Post Office Box 7880 San Francisco,

CHONG-MOON LEE

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

In re DIAMOND MULTIMEDIA SYSTEMS,

REPLY MEMORANDUM IN SUPPORT OF DEFENDANT CHONG-MOON LEE'S MOTION TO DISMISS

THE AMENDED CONSOLIDATED CLASS ACTION COMPLAINT

PARTICIPATION IN THE ALLEGED FRAUD WITH ADEQUATE PARTICULARITY

Plaintiffs completely ignore the numerous cases rejecting their boilerplate allegation of Mr.

Plaintiffs make no allegations showing a "special relationship" between Mr. Lee and the

Plaintiffs fail to discuss the numerous Northern District decisions rejecting an inference of

THAT A SALE OF ONLY 5% OF A DEFENDANT'S STOCK RAISES A "STRONG INFERENCE" OF SCIENTER

DEFENDANT SUCH AS MR. LEE A "CONTROLLING PERSON," AND FAIL TO DISCUSS MR. LEE'S ON-POINT

Securities Litigation), Fed.

Sec. L. Rep. (CCH) (1994-95 Transfer Binder) ¶ 98,367 (N.D.

Delaware Journal of Corporation Law

Defendant CHONG-MOON LEE hereby replies to plaintiffs' Opposition to Mr. Lee's motion to

Plaintiffs' Opposition shares the failings that permeate their Complaint; it fails to treat

on virtually all issues plaintiffs' Opposition in wholesale fashion ignores the pertinent

Mr. Lee's opening brief showed that this District has repeatedly deemed inadequate

Plaintiffs' argument that Mr. Lee had a "special relationship" with Diamond is clearly wrong

THE COMPLAINT DOES NOT PLEAD MR. LEE'S PARTICIPATION IN THE ALLEGED FRAUD WITH ADEQUATE

There are no such allegations of contemporaneous trading in the complaint.

PILLSBURY MADISON & SUTRO LLP WALTER J. ROBINSON III MORGAN R. SMOCK

California.

21 . REPLY MEMORANDUM IN SUPPORT OF MOTION TO STRIKE

EXTRACTED KEY WORDS

DEFENDANTS
COURT
CALIFORNIA
PLEAD
ALLEGATIONS
DIAMOND
FAIL
CORPORATIONS
DEMURRER
SCHROEDER
ANALYST
MIRKIN
COMPLAINT
SECURITIES
SUPERIOR COURT
STATE BAR
ANALYST REPORTS
TRANSACTIONS
LIABILITY
MISREPRESENTATIONS
SUPREME COURT
SECURITIES LAWS
CORPORATIONS CODE
ABETTING LIABILITY
MULTIMEDIA SYSTEMS
HYUNG HWE HUH
FALSE STATEMENTS
AFTERMARKET STOCK SALES
VIOLATION

STEVEN M. SCHATZ, State Bar # 118356
TERRY T. JOHNSON, State Bar # 121569
MARTA CERVANTES, State Bar # 139082
THOMAS J. MARTIN, State Bar # 150039
REBECCA MITCHELLS, State Bar # 151683
WILSON, SONSINI, GOODRICH & ROSATI
Professional Corporation
650 Page Mill Road
Palo Alto, California  94304-1050
Telephone:  (415) 493-9300

Attorneys for Defendants
WILLIAM J. SCHROEDER, GARY B. FILLER,
HYUNG HWE HUH and DIAMOND
MULTIMEDIA SYSTEMS, INC.

                 SUPERIOR COURT OF CALIFORNIA

                    COUNTY OF SANTA CLARA



JOANNE PASS, On Behalf of Herself   )   CONSOLIDATED CLASS
and All Others Similarly Situated,  )   ACTIONS:
                                    )
          Plaintiff,                )   CV758927; CV759012
                                    )   and CV759270
     v.                             )
                                    )   DEFENDANTS' REPLY
HYUNG HWE HUH, et al.,              )   MEMORANDUM IN
                                    )   SUPPORT OF THEIR
          Defendants.               )   DEMURRER AND MOTION
                                    )   TO STRIKE
                                    )
                                    )   Date:  December 12, 1996
                                    )   Time:  9:00 a.m.
                                    )   Dept:  17
____________________________________)




I.   INTRODUCTION AND SUMMARY

     In their opening brief, defendants detailed why plaintiffs'

verbose, convoluted Complaint fails to adequately plead essential

SNIPPETS:

California 94304-1050 Telephone:

HYUNG HWE HUH and DIAMOND

MULTIMEDIA SYSTEMS, INC.

SUPERIOR COURT OF CALIFORNIA

In their opening brief, defendants detailed why plaintiffs'

convoluted Complaint fails to adequately plead essential

demurrer, plaintiffs rely on phantom allegations that do not appear

attention from their failure to plead a cause of action.

The language and legislative history of Corporations Code

only to in-state securities transactions.

but the Complaint makes no such allegations.

Plaintiffs distort the Supreme Court's holding in Mirkin

PLAINTIFFS FAIL TO STATE A CAUSE OF ACTION UNDER CALIFORNIA CORPORATIONS CODE SECTIONS 25400

The entire intent of the California Securities Laws is to

The California Supreme Court long ago established that where the

Section 25500 merely creates a remedy for violation of Section 25400.

Diamond had engaged in aftermarket stock sales,

is no "aiding and abetting" liability for violation of § 25400.

expressly recommended that aiding and abetting liability apply to

statements attributed to Defendants Schroeder and Filler fail to

misrepresentations, have pled a cause of action for deceit."

on one or more of the false statements alleged herein" is no

PLAINTIFFS HAVE FAILED TO ALLEGE THAT DEFENDANTS ARE LIABLE FOR STATEMENTS MADE IN ANALYST

22 . MEMO IN SUPPORT OF THE MOTION TO STRIKE

EXTRACTED KEY WORDS

DIAMOND
CALIFORNIA
ALLEGE
FAIL
DEFENDANTS
SECURITIES
COURT
PLEAD
CALIFORNIA CORPORATIONS CODE
PURCHASE
ALLEGATIONS
COMPLAINT
SCHROEDER
STOCK
SECURITIES LAWS
MISLEADING
JURISDICTION
PREREQUISITES
SUPERIOR COURT
CCH
MISREPRESENTATIONS
STOCK OFFERING
MISSTATEMENT
DISMISSING STATEMENTS
INTERNAL CONTROLS
VIOLATIONS
DIAMOND MULTIMEDIA
HYUNG HWE HUH
TRANSACTIONS


STEVEN M. SCHATZ, State Bar # 118356
TERRY T. JOHNSON, State Bar # 121569
MARTA CERVANTES, State Bar # 139082
THOMAS J. MARTIN, State Bar # 150039
REBECCA MITCHELLS, State Bar # 151683
WILSON, SONSINI, GOODRICH & ROSATI
Professional Corporation
650 Page Mill Road
Palo Alto, California  94304-1050
Telephone:  (415) 493-9300

Attorneys for Defendants
WILLIAM J. SCHROEDER, GARY B. FILLER,
HYUNG HWE HUH and DIAMOND MULTIMEDIA SYSTEMS, INC.

                 SUPERIOR COURT OF CALIFORNIA

                    COUNTY OF SANTA CLARA



JOANNE PASS, On Behalf of Herself   )   CONSOLIDATED CLASS
and All Others Similarly Situated,  )   ACTIONS:
                                    )
          Plaintiff,                )   CV758927; CV759012
                                    )   and CV759270
     v.                             )
                                    )   MEMORANDUM OF POINTS
HYUNG HWE HUH, et al.,              )   AND AUTHORITIES IN
                                    )   SUPPORT OF THE
          Defendants.               )   DIAMOND DEFENDANTS'
                                    )   DEMURRER AND MOTION
                                    )   TO STRIKE
                                    )
                                    )   DATE:  November 26, 1996
                                    )   TIME:  9:00 a.m.
                                    )   DEPT:  17
____________________________________)





/ / /


_______________________________________________________________________________

SNIPPETS:

California 94304-1050 Telephone:

WILLIAM J. SCHROEDER, GARY B. FILLER,

HYUNG HWE HUH and DIAMOND MULTIMEDIA SYSTEMS,

SUPERIOR COURT OF CALIFORNIA

PLAINTIFFS FAIL TO STATE A CAUSE OF ACTION FOR VIOLATIONS

Prerequisites for Causes of Action Under Sections

That Their Purchases of Diamond Securities Were Made

The Individual Defendants May Not Be Held Liable

PLAINTIFFS' SECTION 1709 AND 1710 CLAIMS FAIL BECAUSE PLAINTIFFS FAIL ADEQUATELY TO ALLEGE

PLAINTIFFS FAIL TO PLEAD FACTS SUFFICIENT TO STATE A CAUSE

Diamond Made No Misrepresentations Regarding The

Misstatement Regarding The Edge

Inventory Allegations

The Complaint Fails To Allege That Diamond's

Material Omission Concerning Internal Controls

Sec. L. Rep. (CCH) ¶ 98,363 (N.D.

purchasers of Diamond Multimedia stock from October 1995 to June

California securities laws far enough to fit federal-style

Sections 25400 and 25500 of the California Corporations Code.

misstatements for the purpose of inducing the purchase of their

connection with Diamond's November 1995 stock offering.

misleading.

PLAINTIFFS FAIL TO STATE A CAUSE OF ACTION FOR VIOLATIONS OF THE CALIFORNIA CORPORATIONS CODE.

applicability to all securities transactions throughout the nation.

"the committee agreed that the basis of jurisdiction and regulation

23 . PETITION FOR PEREMPTORY WRIT OF MANDATE

EXTRACTED KEY WORDS

CLASS ACTIONS
CALIFORNIA
PETITION
WRIT
SUPERIOR COURT
DIAMOND
PARTIES
MANDATE
DISTRICT
PLAINTIFFS
RELIEF
LAW
RESPONDENT COURT
SECURITIES
PETITIONERS
ALLEGATIONS
PEREMPTORY WRIT
SANTA CLARA
LITIGATION
DIAMOND MULTIMEDIA SYSTEMS
DIAMOND MULTIMEDIA
REAL PARTIES
HYUNG HWE HUH
DEFENDANTS
PENDING RESOLUTION
CORPORATIONS
AUTHORITIES
SUPPORT THEREOF
HONORABLE PETER

                  COURT OF APPEAL OF CALIFORNIA

                    SIXTH APPELLATE DISTRICT

                          DIVISION ONE


     DIAMOND MULTIMEDIA SYSTEMS, INC.; WILLIAM J. SCHROEDER;
     GARY B. FILLER; and, HYUNG HWE HUH,

                                   Petitioners,

     SUPERIOR COURT OF CALIFORNIA FOR
     THE COUNTY OF SANTA CLARA,

                                   Respondent.
___________________________________________________________________

     JOANNE PASS, et al.,
                                   Real Parties In Interest.
___________________________________________________________________

                    Santa Clara Superior Court
            Case Nos. CV758927, CV759012 and CV759270
                     (Consolidated for Trial)
 From the November 15, 1996 Order of the Honorable Peter G. Stone
___________________________________________________________________

             PETITION FOR PEREMPTORY WRIT OF MANDATE
                  OR OTHER APPROPRIATE RELIEF;
     MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF;
                EXHIBITS FILED SEPARATELY HEREWITH

  IMMEDIATE STAY OF FURTHER SUPERIOR COURT PROCEEDINGS REQUESTED
___________________________________________________________________

WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
STEVEN S. SCHATZ, State Bar No. 118356
TERRY T. JOHNSON, State Bar No. 121569
MARTA CERVANTES, State Bar No. 139082
THOMAS J. MARTIN, State Bar No. 150039           Attorneys for Petitioners
REBECCA A. MITCHELLS, State Bar No. 151683       DIAMOND MULTIMEDIA
650 Page Mill Road                               SYSTEMS, INC.; WILLIAM J.
Palo Alto, California  94304-1050                SCHROEDER; GARY B. FILLER;
Telephone:  (415) 493-9300                       and, HYUNG HWE HUH

SNIPPETS:

SIXTH APPELLATE DISTRICT

DIAMOND MULTIMEDIA SYSTEMS, INC.; WILLIAM J. SCHROEDER;

GARY B. FILLER; and, HYUNG HWE HUH,

SUPERIOR COURT OF CALIFORNIA FOR THE COUNTY OF SANTA CLARA,

1996 Order of the Honorable Peter G. Stone

PETITION FOR PEREMPTORY WRIT OF MANDATE

OR OTHER APPROPRIATE RELIEF; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF;

Real Parties In Interest Filed A Class Action In State Court Based On The Same Allegations As

The Federal Action Plaintiffs From Currently

Court Litigation Was Denied By The Respondent

Petitioners Have No Adequate Remedy At Law and Properly File This Petition For A Writ Of

THIS COURT SHOULD EXERCISE ITS POWER TO ISSUE A PEREMPTORY WRIT OF MANDATE TO CORRECT THE

THE RESPONDENT COURT ABUSED ITS DISCRETION IN DENYING PETITIONERS' MOTION TO STAY THE STATE

For Resolving Federal And State Securities Claims.

Caiafa Prof. Law Corp. v.

California Corporations Code §§ 25400 and 25500.

and to protect the defendants and the courts

Routine filing of duplicative securities class actions in both

Petitioners' Motion To Stay The State Court Proceeding Pending Resolution Of The Federal

24 . MEMORANDUM SUPPORTING MOTION TO STAY PROCEEDINGS

EXTRACTED KEY WORDS

LAW
PLAINTIFFS
CALIFORNIA
SECURITIES LAWS
DEFENDANTS
DIAMOND
FRAUD
JURISDICTION
LITIGATION
DISCOVERY
DIAMOND MULTIMEDIA SYSTEMS
STATE BAR
DIAMOND MULTIMEDIA
JUDICIAL ECONOMY
PENDING RESOLUTION
HYUNG HWE HUH
SCHROEDER
DIAMOND STOCK
UNSEEMLY CONFLICTS
NATIONWIDE CLASS
ENACTED REQUIREMENTS
SUPERIOR COURT
ROSATI
GOODRICH
SONSINI
WILSON
MITCHELLS
STATE COMPLAINT
RESOURCES

STEVEN M. SCHATZ, State Bar # 118356
TERRY T. JOHNSON, State Bar # 121569
MARTA CERVANTES, State Bar # 139082
THOMAS J. MARTIN, State Bar # 150039
REBECCA A. MITCHELLS, State Bar # 151683
WILSON, SONSINI, GOODRICH & ROSATI
Professional Corporation
650 Page Mill Road
Palo Alto, California  94304-1050
Telephone:  (415) 493-9300

Attorneys for Defendants
WILLIAM J. SCHROEDER, GARY B. FILLER,
HYUNG HWE HUH and DIAMOND MULTIMEDIA SYSTEMS, INC.


                 SUPERIOR COURT OF CALIFORNIA

                    COUNTY OF SANTA CLARA


JOANNE PASS, On Behalf of Herself   )   CONSOLIDATED CLASS
and All Others Similarly Situated,  )   ACTIONS
                                    )
          Plaintiff,                )   CV758927; CV759012 and
                                    )   CV759270
     v.                             )
                                    )   MEMORANDUM
                                    )   SUPPORTING
HYUNG HWE HUH, et al.,              )   DEFENDANTS' MOTION TO
                                    )   STAY PROCEEDINGS
          Defendants.               )
                                    )   DATE:  November 12, 1996
                                    )   TIME:  9:00 a.m.
____________________________________)   DEPT:  17



                      I.  INTRODUCTION

     To evade recently enacted requirements of the federal

securities laws, securities fraud plaintiffs have adopted a

strategy of two-track litigation.  One case is filed in federal

court, asserting federal securities law claims over which the

SNIPPETS:

California 94304-1050 Telephone:

Attorneys for Defendants

HYUNG HWE HUH and DIAMOND MULTIMEDIA SYSTEMS,

SUPERIOR COURT OF CALIFORNIA

To evade recently enacted requirements of the federal

strategy of two-track litigation.

allowing plaintiffs to skirt the procedural

and discovery restrictions of federal law.

reforms to the federal securities laws.

filing vague securities fraud allegations,

represent a nationwide class of stock purchasers who bought stock