The class action lawsuit hinges on shareholder complaints concerning upper-management communications between August, 2005 and May, 2006 and insider trades made in December, 2005 and January, 2006.

The plaintiff in the case, Stephan Dennis, alleges that top executives at Midway knew of a primary investor’s intentions to relenquish ownership of the company and sold out before the stock price took a hit.

Dennis and other shareholders are joining with at least nine other law firms around the country in response to the millions of dollars lost by investors as Midway’s stock plummeted 75 percent to $6 per share recently.  Stock prices were around $22 per share at the time of the alleged insider trading.

Media tycoon Sumner Redstone, the beneficial owner of more than 89 percent of Midway Games, Inc, turned over majority control and almost 33 million shares of the company to his daughter, Shari Redstone, on December 28, 2005.

“Insiders knew [Mr. Redstone’s involvement] was the only thing propping up the stock,” said Kenneth Vianale, a lawyer with Florida-based Vianale & Vianale LLP. Vianale’s firm joined the class action suit on Monday.

The case against the videogame company alleges that insiders knew Redstone was planning to give control over to National Amusements Inc., a Massachusetts-based movie theater company controlled by his daughter.

Ms. Redstone is the president of both National Amusements, Inc. and Sumco, Inc. Together, these two companies control almost 75 percent of Midway.

But less than two weeks before Mr. Redstone relinquished his direct control, the President and CEO of Midway Games, David Zucker, began to unload 550,000 of his own Midway shares.  At the time, Midway stock was trading at a six year high, reaching a peak of $23.26 per share in mid-December.  By January 6, he had pocketed more than $9 million before taxes.  Zucker had never before sold Midway stock.

Mr. Zucker was not alone. Thomas Powell, Executive Vice President and CFO of Midway, sold 40,500 shares on December 20, just eight days before Redstone’s deal. The same day, Miguel Iribarren, Midway’s vice president of finance sold 15,000 shares.  Assistant Treasurer James Boyle sold 15,000 shares the next day.  Chief Marketing Officer Steven Allison sold 21,250 the day after that.  These five men are the defendants in the class action suit.

Two months after the Redstone deal went into effect, stock prices for Midway had dropped more than 50 percent to $9.91 per share.

In order to be successful, attorneys for the plaintiffs will have to prove Midway executives intentionally withheld knowledge of the Redstone deal and knew that executing trades on that knowledge was illegal, said Mitch Herr, a former chief trial council for the southeast region of the U.S. for the SEC.

Plaintiffs must also show that withholding information about the Redstone deal constituted an omission or misrepresentation of the company's financial prospects, and that they have been damaged. 

At this time there is no reason to believe the Redstone family was a part of the allegedly illegal activity, Vianale says.

A spokesperson for Midway Games, Inc. was not available for comment.

Shares of Midway Games, Inc. were up 7 cents to $6.07 per share in afternoon trading Wednesday.  Midway shares are down nearly 29 percent from a year ago.

Reta was sentenced to 40 years in prison by Judge Joe Lopez immediately after he entered the plea, which could have brought a sentence of up to 99 years.

Reta's attorney, Eduardo Pena, said the American teen, who was born in Houston but grew up in Laredo, decided to plead guilty — with the right to appeal — after a statement he signed was admitted into evidence over Pena's objections. In the statement, he admitted being the driver of the car used in the murder of Noe Flores.

"Under the circumstances, it was the best we could do," Pena said of the plea.

A witness testified Wednesday that Rosalio "Bart" Reta was among three men in an organized cell paid $15,000 to kill Flores in January 2006.

Prosecutors say Reta and two other accused hit men were actually supposed to kill the half brother of Flores but mistakenly killed Flores instead. Flores was shot at least seven times from the back while standing in front of a Laredo home.

Reta, a baby-faced teen with dimples, was only facing charges in Flores' death this week, but he is separately charged in another Laredo killing, also allegedly carried out on the orders of the cartel.

Assistant District Attorney Jesse Guillen said that trial would likely start soon and would give authorities another chance to add time to the teen's sentence. Laredo investigators believe Reta began killing for the cartel in Mexico and was moved to Laredo when the cartel began placing operations on the U.S. side.

Despite Reta's youth and his 5-foot-2 stature, "he's a cold-blooded killer," Guillen said. "There's no doubt about it."

During testimony Wednesday, Laredo police Detective Robert Garcia laid out a pattern of phone records that connected Reta to two other members of his cartel-controlled group and suppliers of the car and guns used in the Flores killing.

The accused ring leader in the Flores killing, Jesus "Jesse" Gonzales, fled to Mexico after making bail. The third member of the group, Gabriel Cardona, pleaded guilty and is serving an 80-year sentence.

The California Court of Appeal, in a 2-1 decision, said that Daniel and Kathleen Sheehan waived their privacy concerns because they knew of the pat-down searches before they bought their tickets for the 2006-2007 season. They sued in December 2005 after experiencing pat-down searches that season.

The court said the couple could quit going to games if they were offended by the searches.

"By voluntarily re-upping for the next season under these circumstances, rather than opting to avoid the intrusion by not attending the games at Monster Park, the Sheehans impliedly consented to the pat-downs," Justice Timothy Reardon wrote for the majority, adding that the "Sheehans have no reasonable expectation of privacy."

Justice Maria Rivera dissented, arguing that her colleagues too easily tossed aside the Sheehans' privacy concerns.

"The courts' role in protecting privacy rights should not be so readily abdicated," Rivera wrote, noting that the Sheehans have no other way to watch the team in person. "If you are the only game in town, requiring your customers to either submit to a pat-down search or walk away does not present the kind of genuine choice upon which the majority's reasoning is premised."

ACLU lawyers, who helped the Sheehans with their lawsuit, and a 49ers spokeswoman did not immediately return calls for comment.

A federal appeals court in Florida and a federal district court judge in Seattle each ruled similarly in upholding pat-down searches at Tampa Bay Buccaneers and Seattle Seahawks home games.

``She came to accept that what she did was wrong,'' defense lawyer William Massey said before the hearing. ``She stood very firmly, for a very long time, in her belief that she was not guilty.''

In exchange for her plea, prosecutors dropped five more serious charges of extortion, each carrying a maximum of 20 years in prison.

Jarvis Malone, a former aide at the Arlington Developmental Center (ADC) in Arlington, Tenn., pleaded guilty today in U.S. District Court in Memphis to violating the constitutional rights of a mentally handicapped patient. During his plea hearing, Malone acknowledged that in June 2005, while working as a developmental technician at the ADC, a state-operated residential treatment facility for the mentally handicapped, he stood the victim against a wall and assaulted the victim. According to evidence presented at the hearing, Malone assaulted the victim to punish him. Malone agreed that his conduct violated federal law.

Malone faces a maximum sentence of 10 years imprisonment and a fine of $250,000. His sentencing hearing is scheduled for Oct. 16, 2007. “Civil rights laws are meant to protect all Americans, including the most vulnerable members of our society,” said Wan J. Kim, Assistant Attorney General for the Civil Rights Division. “The Justice Department is committed to prosecuting those who set aside those laws and violate the constitutional rights of others.”

“The U.S. Attorney’s Office will continue to prosecute those individuals who violate the civil rights of other people. We appreciate the hard work and dedication of the Federal Bureau of Investigation and the Tennessee Bureau of Investigation in their pursuit of ensuring that our citizens’ rights are protected,” said David Kustoff, U.S. Attorney for the Western District of Tennessee.

“The outstanding efforts of our Medicaid Fraud Control Unit is proven here today. Behavior exemplified in this case will not be tolerated in the state of Tennessee. We appreciate the coordination of all the state and federal agencies whose hard work has brought justice,” said Mark Gwyn, Director of the Tennessee Bureau of Investigation.

The Civil Rights Division is committed to the vigorous enforcement of every federal criminal civil rights statute, such as laws that prohibit the wilful use of excessive force or other acts of misconduct by law enforcement officials. In fiscal year 2006, nearly 50 percent of the cases brought by the Criminal Section of the Civil Rights Division involved such prosecutions. Since fiscal year 2001, the Division has convicted 50 percent more defendants for excessive force and official misconduct than in the preceding six years.

This case was investigated by Special Agent Tracey Harris of the Federal Bureau of Investigation and the Medicaid Fraud Control Unit of the Tennessee Bureau of Investigation. Assistant U.S. Attorney Steve Parker of the U.S. Attorney’s Office in Memphis and Trial Attorney Ed Caspar from the Civil Rights Division of the Department of Justice are prosecuting the case.

"This is a major victory for recording artists and record labels whose hard work and creativity provides the music around which the Internet radio business is built," SoundExchange executive director John Simson said. "Notwithstanding this victory, we continue to reach out to the webcasting community to reach business solutions."

SoundExchange was created to distribute the royalty following the 1995 Digital Performance Right in Sound Recording Act. The royalty is split 50-50 between copyright owner, typically a label but sometimes the artists or other entities, and the performer.

Webcasters had challenged the royalty, contending that a panel of copyright royalty judges erred when they dramatically increased the rate this year.

"Digital Media Assn. members and all Webcasters are disappointed by the court's decision and are now forced to make very difficult decisions about what music, if any, they are able to offer," executive director Jonathan Potter said. "The result will certainly be fewer outlets for independent music, less diversity on the Internet airwaves, and far fewer listening choices for consumers. We're hopeful that Congress will take steps to ensure that Internet radio is not silenced, and that Webcasters and SoundExchange will find a way to compromise and maintain the diversity and opportunity of Internet radio."