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FSTI (OTCBB) FreeStar Technologies Announces Petition by Short Selling Syndicate

FRIDAY , JANUARY 10, 2003 09:46 AM

SANTO DOMINGO, Dominican Republic, Jan 10, 2003 (BUSINESS WIRE) -- FreeStar Technologies, Inc. (OTCBB:FSTI), a company providing one of the world's first live, operational debit and ATM solutions with PIN-authenticated payment solution on the Internet, PaySafeNow, and a leading Northern European Processing subsidiary, Rahaxi Processing Oy, has been notified that a Chapter 7 Involuntary Bankruptcy Petition has been filed against the Company.

Paul Egan, President and Chief Executive Officer of FreeStar, stated: "There is clearly a connection between this petition, filed in the Southern District of New York yesterday afternoon by Larry Ivan Glick on behalf of vFinance, Inc., David Stefansky, Richard Rosenblum, Marc Siegel, Boat Basin Investors LLC, and Papell Holdings Ltd., and the short selling activities of vFinance and affiliates during the month of December 2002. We dismiss the petition as a frivolous and transparent attempt to mitigate the financial losses of the aforementioned individuals' illicit short selling activities. FreeStar Technologies is solvent and will therefore defend the petition vigorously."

Continuing, Egan added: "This is a bad faith filing, pure and simple; vFinance has possession of collateral underpinning their claim, thereby rendering the debt secure. We will continue to resist Messrs. Stefansky, Rosenblum and Siegel's increasingly desperate attempts to circumvent Rule 144 provisions. FreeStar Technologies has funding commitments exceeding the claims in question and will seek substantial punitive and consequential damages pursuant to the Bankruptcy Code."



About FreeStar Technologies, Inc.


With Corporate headquarters in Santo Domingo, Dominican Republic, and offices in Dublin, Ireland, and Helsinki, Finland, FreeStar Technologies is focused on exploiting a first-to-market advantage for enabling ATM and debit card transactions on the Internet. FreeStar Technologies' Enhanced Transactional Secure Software ("ETSS") is a proprietary software package that empowers consumers to consummate secure e-commerce transactions on the Internet using credit, debit, ATM (with PIN) or smart cards. It sends an authorization number to the e-commerce merchant, rather than the consumer's credit card information, to provide a maximum level of security. FreeStar entered into an agreement to acquire leading Northern European processing, Rahaxi Processing Oy, in September 2002. For more information, please visit the Company's web sites at http://www.freestartech.com, http://www.rahaxi.com and http://www.epaylatina.com

Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.


CONTACT: FreeStar Technologies, Inc., Santo Domingo
Paul Egan, 809/503-5911
[e-mail]

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