UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
ZITTO INVESTMENTS, INC., and DAVID M.
MEHALICK, on behalf of themselves and all
others similarly situated, CIVIL ACTION NO.
Plaintiffs, CLASS ACTION COMPLAINT
FOR VIOLATIONS OF FEDERAL
v. SECURITIES LAWS
FIREPOND, INC.; KLAUS P. BESIER; PAUL JURY TRIAL DEMANDED
K. MCDERMOTT; FLEETBOSTON
ROBERTSON STEPHENS INC.; DAIN
RAUSCHER INC.; and SG COWEN
SECURITIES CORP.,
Defendants.
Plaintiffs, on behalf of themselves and all other persons similarly situated, by
attorneys, for Plaintiffs' Complaint, allege upon the investigation made by and through Plaintiffs'
which included, inter alia, a review of relevant filings made by FirePond, Inc.
"Company") with the Securities and Exchange Commission, as well as, tele-conferences, press
news articles, analyst reports, and media reports concerning the Company. Furthermore, this
is based upon Plaintiffs' personal knowledge as to Plaintiffs' own acts, and upon information and
to all other matters, based upon the aforementioned investigation.
NATURE OF THE ACTION
1. This is a class action on behalf of all persons, other than defendants and certain
parties, who purchased, converted, exchanged or otherwise acquired FirePond common stock, as defined
below, including, but not limited to, during the period from February 3, 2000 through December 6,
(the "Class Period"), inclusive, to recover damages caused by defendants' violations of the federal
law.
2. In the wake of the raging bull market of the 1990's lies a series of
malfeasance by major Wall Street securities firms. As reported in national news sources such as
York Times, The Wall Street Journal, and Fortune Magazine, prosecutors in New York and
SNIPPETS:
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
K. MCDERMOTT; FLEETBOSTON ROBERTSON STEPHENS INC.; DAIN
Plaintiffs, on behalf of themselves and all other persons similarly situated, by Plaintiffs'
which included, inter alia, a review of relevant filings made by FirePond, Inc. ("FirePond"
"Company") with the Securities and Exchange Commission, as well as, tele-conferences, press
news articles, analyst reports, and media reports concerning the Company.
This is a class action on behalf of all persons, other than defendants and certain related
malfeasance by major Wall Street securities firms.
investment banks charged issuers of new securities excessive commissions and inflated
Second, investigators are examining, and have evidence, that major investment banks
allocated shares of especially hot initial public offerings to favored,
for promises by these customers that they would purchase additional shares of the IPOs in the
the IPO boom include Morgan Stanley Dean Witter and Goldman Sachs Groups,
and maintain the price of the IPOs in the aftermarket once the initial distribution period
stock price, above the offering price, and create a false sense of demand that would attract
obtain allocations of stock on the offering - - but before the first after-market trade.
Securities Act of 1933 15 U.S.C. §§ 77k, 77land 77o and Sections 10and
including the preparation and dissemination in this judicial district of the Prospectus
during the Class Period (including the trading of FirePond stock based upon misleading
the underwriter defendants conduct substantial business in this district.
Besier and McDermott are sometimes herein referred to as the Individual Defendants.
control to cause the Company to engage in the violations and improper practices complained of
offering of 5,000,000 shares of common stock at $22 per share pursuant to a Prospectus dated
of the reports and press releases alleged herein to be materially false and/or misleading
Manipulated Securities omitted and/or misrepresented material facts about the offering of
In direct contravention to Rules 101 and 102 of Regulation M of the Exchange Act,
direct participation and agreement of FirePond and the Individual Defendants.
violation of Regulation M, which governs market manipulation.
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