NEW YORK, Aug. 17, 2001 (PRIMEZONE) -- A class action lawsuit was filed in the U.S. District Court for the Southern District of New York on behalf of all shareholders who purchased the common stock of Internet Infrastructure HOLDRs (AMEX:IIH) and other securities described below (the "Class Securities") between August 1, 1998 and August 1, 2001 (the "Class Period").
The Complaint alleges that defendants, all major investment banks, violated federal securities laws and state law by systematically issuing glowing "buy" recommendations for securities of technology companies that defendants knew or should have known had dubious financial histories, negative cash flows, insufficient revenues to cover operating expenses, and overall deteriorating fundamentals. These "buy" recommendations, issued repeatedly by defendants, caused the shares of the Class Securities to trade at artificially inflated prices, sometimes as high as hundreds of dollars per share, during the Class Period. Today, many of these stocks trade at pennies per share or no longer trade at all. The named defendants all participated as underwriters of the Class Securities' IPOs and/or had other investment banking relationships with these companies which generated hundreds of millions of dollars in investment banking fees. The defendants are: Credit Suisse First Boston Corp.; The Goldman, Sachs Group, Inc.; Merrill Lynch, Pierce, Fenner & Smith, Inc.; Morgan Stanley Dean Witter & Co.; BancBoston Robertson Stephens, Inc.; and Salomon Smith Barney, Inc.
The Complaint also alleges that defendants failed to disclose that (i) each one of them had internal policies that required analysts to issue "buy" recommendations for Class Securities in order to obtain investment banking business from the companies issuing the Class Securities; (ii) defendants and their employees, including the analysts, frequently acquired shares of the Class Securities prior to the IPO at a fraction of the price paid by the public and sold these shares at the higher prices caused by defendants' conduct; and (iii) defendants failed to have or enforce compliance procedures to prevent their analysts from issuing misleading reports to serve the interests of their investment banking clients.
The Class Securities are:
Akamai Tech. Inc. InfoSpace, Inc.
BEA Systems, Inc. Inktomi Corp.
BroadVision, Inc. InterNAP Network.
Digital Island, Inc. Kana Software (Nasdaq:KANA)
E.Piphany, Inc. NaviSite, Inc.
Exodus Comm., Inc. Openwave Systems Inc. (Nasdaq:OPWV)
Portal Software, Inc.
RealNetworks, Inc.
USinternetworking, Inc. (Nasdaq:USIX)
VeriSign, Inc.
Vitria Technology, Inc.
If you have purchased any of the Class Securities described above and are interested in obtaining more information about these lawsuits, you may contact our firm at the numbers listed below. If you are a member of the proposed class described above, you may, no later than October 1, 2001, seek to participate in this action as a lead plaintiff.
Eduard Korsinsky, Esq. or
Ben Coleman, Legal Assistant
Beatie And Osborn LLP
521 Fifth Avenue, 34th Floor
New York, New York 10175
Toll Free No.: 800-891-6305
Tel. No.: 212-888-9000
Fax No.: 212-888-9664
E-mail: clientrelations@bandolaw.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca