UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
RICHARD LANE, on behalf of himself and all others X
similarly situated, :: Index No.
Plaintiff, :: CLASS ACTION COMPLAINT
FOR VIOLATIONS OF THE
vs. :: FEDERAL SECURITIES
LAWS
deltathree.com, INC., LEHMAN BROTHERS, INC., :
MERRILL LYNCH, PIERCE, FENNER & SMITH :
INCORPORATED, BEAR, STEARNS & CO., INC., :
GOLDMAN SACHS & CO., AMOS SELA, AND :
MARK J. HIRSCHHORN, ::
Defendants. :::X
Plaintiff, by his undersigned attorneys, individually and on behalf of the Class described
below, upon information and belief, based upon, inter alia, the investigation of counsel, which
includes, among other things, a review of public announcements made by defendants, Securities
and Exchange Commission ("SEC") filings made by defendants, and press releases, and media
reports, except as to the paragraph applicable to the named plaintiff which is alleged upon
personal knowledge, brings this Complaint (the "Complaint") against defendants named herein,
and alleges as follows:
SUMMARY OF ACTION
1. This is a securities class action alleging that the Registration Statement and
Prospectus dated November 22, 1999 for the issuance and initial public offering of 6,000,000
shares of deltathree.com, Inc. ("deltathree"or the "Company") common stock (the "Offering"),
contained material misrepresentations and/or omissions. The Registration Statement and
Prospectus are referred to herein collectively as the "Prospectus." Defendants are Deltathree and
two members of its senior management team, who were responsible for the materially false and
misleading statements made in the Prospectus, and four underwriters of Deltathree's Offering,
who engaged in a pattern of conduct to surreptitiously extract inflated commissions greater than
SNIPPETS:
Plaintiff, by his undersigned attorneys, individually and on behalf of the Class described
includes, among other things, a review of public announcements made by defendants, Securities
and Exchange Commission filings made by defendants, and press releases, and media
This is a securities class action alleging that the Registration Statement and
Prospectus dated November 22, 1999 for the issuance and initial public offering of 6,000,000
shares of deltathree.com, Inc. common stock,
misleading statements made in the Prospectus, and four underwriters of Deltathree's Offering,
the Securities Act of 1933 and 28 U.S.C. § 1331.
Plaintiff Richard Lane purchased shares of deltathree issued in connection with
stock at a price of $15.00 per share.
Defendant Lehman Brothers, Inc. was, at all relevant times
was, at all relevant times herein, a registered broker-dealer and member of the NASD.
Defendant Bear, Stearns & Co. Incorporated was, at all relevant
who acquired the common stock of Deltathree pursuant or traceable to the false and misleading
Members of the Class are so numerous that joinder of all members is
deltathree agreed to sell the Underwriter Defendants
4,168,650 shares issued in connection with the Offering, with Lehman Brothers receiving
We have granted to the underwriters an option to purchase up to an aggregate of 900,000
to and did pay the Underwriter Defendants excessive commissions on transactions in other
commissions was determined ex post facto by arrangements including specific formulas tied to
to purchase additional Deltathree shares in the aftermarket at pre-determined prices.
In most cases, a majority of IPO shares are allocated to institutional investors, including
The statements in the Prospectus and referenced in ¶¶21-24 were materially false
Item 501 of Regulation S-K specifically governs the forepart of the Registration
the Commission addressed reports that certain dealers participating in distributions of new
statements of material facts, omitted to state other facts necessary to make the statements
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