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16 Oct 2006

Hedge Funds accused of Securities Violation

Hedge fund managers Michael A. Roth and Brian J. Stark have had a complaint lodged aganst them by Multi Fineline Electronix (M-Flex) with the United States District Court.

The complaint alleges that the Stark hedge fund filings are misleading to their stockholders and that the hedge fund failed to disclose their 32,075,000 shares of M-Flex securities. The complaint asks that the hedge funds be required to amend their filings stateing the nature of their investment and wants an injunction keeping them from voting their shares in favor of the offer.

The complaint also alleges that the Stark hedge funds have been short selling their stock, causing a negative effect on the value of M-Flex stock.

Other hedge funds and management companies controlled by these individuals, including Stark Master Fund Ltd., Stark Asia Master Fund Ltd., Stark Onshore Master Holdings, LLC, Stark Offshore Managements, LLC, and Stark Asia Management, LLC., have also been accused of planning to profit at the expense of the company and its shareholders.

According to the filing with the U.S. Securities and Exchange Commission (SEC), the Stark hedge funds own approximately 4.5 million shares of M-Flex stock, representing approximately 18.4% of M-Flex’s outstanding shares of common stock, and approximately 48% of the shares held by non-affiliated stockholders.

According to Phil Harding, M-Flex’s chairman and chief executive officer, the company believes that the Stark hedge funds have little or no interest in the company’s current business operations and strategies nor in the long term well being of M-Flex.

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