NEW YORK--(BUSINESS WIRE
--Notice is hereby given that a class action lawsuit was filed on July 18, 2001, in the United States District Court for the Southern District of New York, on behalf of purchasers of Chinadotcom Corporation ("Chinadotcom") (NASDAQ:CHINA) common stock between July 12, 1999 and June 28, 2001, inclusive (the "Class Period").
The complaint alleges that defendants violated the federal securities laws by issuing and selling Chinadotcom common stock pursuant to the July 12, 1999 IPO without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors.
The complaint alleges that, in exchange for the excessive commissions, members of the underwriting group allocated Chinadotcom shares to customers at the IPO price of $20.00 per share. To receive the allocations (i.e., the ability to purchase shares) at $20.00, the underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Chinadotcom stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive Chinadotcom's share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the underwriters and their customers to reap enormous profits by buying stock at the $20.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $67-7/64 on July 13, 1999, more than tripling on its first day of trading.
Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the underwriters required their customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation.
The complaint further alleges that defendants violated the Securities Act of 1933 because the Prospectus distributed to investors and the Registration Statement filed with the SEC in order to gain regulatory approval for the Chinadotcom offering contained material misstatements regarding the commissions that the underwriters would derive from the IPO transaction and failed to disclose the additional commissions and "laddering" scheme discussed above.
Plaintiff seeks to recover damages on behalf of class members and is represented by, among others, the law firm of Stull, Stull & Brody. Stull, Stull & Brody has litigated many class actions for violations of securities laws in federal courts over the past 25 years and has obtained court approval of substantial settlements on numerous occasions.
If you bought the common stock of Chinadotcom between July 12, 1999 and June 28, 2001, you may, no later than August 27, 2001, request the Court appoint you as lead plaintiff.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Tzivia Brody, Esq. at Stull, Stull & Brody by calling toll-free 1-800-337-4983, or by e-mail at SSBNY@aol.com, or by fax at 212/490-2022, or by writing to Stull, Stull & Brody, 6 East 45th Street, New York, NY 10017.
CONTACT: Stull, Stull & Brody, New York
Tzivia Brody, Esq., 1-800-337-4983
fax: 212/490-2022
SSBNY@aol.com
--Notice is hereby given that a class action lawsuit was filed on July 18, 2001, in the United States District Court for the Southern District of New York, on behalf of purchasers of Chinadotcom Corporation ("Chinadotcom") (NASDAQ:CHINA) common stock between July 12, 1999 and June 28, 2001, inclusive (the "Class Period").
The complaint alleges that defendants violated the federal securities laws by issuing and selling Chinadotcom common stock pursuant to the July 12, 1999 IPO without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors.
The complaint alleges that, in exchange for the excessive commissions, members of the underwriting group allocated Chinadotcom shares to customers at the IPO price of $20.00 per share. To receive the allocations (i.e., the ability to purchase shares) at $20.00, the underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Chinadotcom stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive Chinadotcom's share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the underwriters and their customers to reap enormous profits by buying stock at the $20.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $67-7/64 on July 13, 1999, more than tripling on its first day of trading.
Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the underwriters required their customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation.
The complaint further alleges that defendants violated the Securities Act of 1933 because the Prospectus distributed to investors and the Registration Statement filed with the SEC in order to gain regulatory approval for the Chinadotcom offering contained material misstatements regarding the commissions that the underwriters would derive from the IPO transaction and failed to disclose the additional commissions and "laddering" scheme discussed above.
Plaintiff seeks to recover damages on behalf of class members and is represented by, among others, the law firm of Stull, Stull & Brody. Stull, Stull & Brody has litigated many class actions for violations of securities laws in federal courts over the past 25 years and has obtained court approval of substantial settlements on numerous occasions.
If you bought the common stock of Chinadotcom between July 12, 1999 and June 28, 2001, you may, no later than August 27, 2001, request the Court appoint you as lead plaintiff.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Tzivia Brody, Esq. at Stull, Stull & Brody by calling toll-free 1-800-337-4983, or by e-mail at SSBNY@aol.com, or by fax at 212/490-2022, or by writing to Stull, Stull & Brody, 6 East 45th Street, New York, NY 10017.
CONTACT: Stull, Stull & Brody, New York
Tzivia Brody, Esq., 1-800-337-4983
fax: 212/490-2022
SSBNY@aol.com
