Press Release
January 23, 2007

Goodwin Procter Wins Dismissal of Securities Class Action for Arbinet thexchange, Inc.

Jan. 23, 2007 — Goodwin Procter securities litigators recently won a significant victory in a shareholder class action case in federal court in New Jersey on behalf of Arbinet-thexchange, Inc. The court granted Arbinet's motion to dismiss the case in its entirety. After the Court threw the complaint out, the plaintiffs agreed to drop the litigation and not appeal the ruling. The litigation has now been ended, with no payment of settlement monies or other amounts by Arbinet.

Arbinet operates the world's leading electronic market for the trading of telephone and data communications capacity, and its customers include the world's largest telecommunications companies. Two months after going public in December 2004, Arbinet issued its first earnings forecast. Four months later, the Company announced that it would be adjusting that forecast downward. The market did not like this news, and Arbinet's stock price dropped as a result. Soon after that, the Company was named in several class action lawsuits, which claimed that the stock price drop and the revised forecast reflected problems that allegedly existed at the time of its initial public offering ("IPO") and that supposedly should have been disclosed in the IPO prospectus and registration statement.

In April 2006, Goodwin Procter's securities litigation group asked the Court to throw the case out. The team argued, among other things, that Arbinet's publicly filed financial statements contradicted the plaintiffs' core allegation that Arbinet was experiencing negative financial trends in the months leading up to its IPO. The Court fully agreed with the team's arguments and adopted them almost verbatim. This win is especially significant since the case claimed violations of Section 11 of the Securities Act of 1933. Because Section 11 does not require a plaintiff to plead or prove intent to defraud, very few Section 11 cases are ever dismissed.

The Goodwin Procter team representing Arbinet was led by Brian Pastuszenski (co-chair of the firm's Securities Litigation and SEC Enforcement Group) and included Deborah Birnbach, Alison Douglass, and Adam Hollingsowrth.