Multimedia, Online and Internet Industry News Sample

Jun 17, 2002 00:58:51

DRUGSTORE.COM: Faces Suits For Securities Act Violations in S.D. NY

FREDERICK, Maryland (SunStream News) -- Drugstore.com, Inc. faces several securities class actions pending in the United States District Court for the Southern District of New York, in connection with its June 27,1999 initial public offering and its March 15,2000 secondary offering. The suit also names as defendants certain of the Company’s present and former officers and directors, and its underwriters. The suits generally allege that the prospectuses through which the Company conducted the initial public offering and the secondary offering (together, the offerings) were materially false and misleading for failure to disclose, among other things, that: (1) the underwriters of the offerings allegedly had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the underwriters allocated to those investors material portions of the restricted number of shares issued in connection with the offerings; and (2) the underwriters allegedly entered into agreements with customers whereby they agreed to allocate Company shares to customers in the offerings in exchange for which customers agreed to purchase additional Company shares in the aftermarket at predetermined prices. The complaints assert violations of various sections of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and seek unspecified damages and other relief. The Company disputes the allegations of wrongdoing in these complaints and intends to vigorously defend itself in these matters.

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Source: Class Action Reporter

Publication Date: 2002-06-17

 

NWS:	LAW
	OFR

COY:	DSCM

IND:	ECM
	HOU
	MTC
	MLM

GEO:	n-us-ny

 

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