UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
WILLIAM WHALEN, on behalf of himself and all others X
similarly situated, : Index No.
:
Plaintiff, : CLASS ACTION COMPLAINT
: FOR VIOLATIONS OF THE
vs. : FEDERAL SECURITIES LAWS
:
DIGITAL RIVER, INC., FLEETBOSTON :
ROBERTSON STEPHENS, BEAR, STEARNS & CO., :
INC., CREDIT SUISSE FIRST BOSTON CORP., :
JOEL A. RONNING AND ROBERT E. STRAWMAN, ::
Defendants. ::::X
Plaintiff, by his undersigned attorneys, individually and on behalf of the Class described
upon information and belief, based upon, inter alia, the investigation of counsel, which includes,
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
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 dated
1998 and the Prospectus August 11, 1998 for the issuance and initial public offering of 3,000,000
shares of Digital River, Inc. ("Digital River" 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 Digital River and two
of its senior management team, who were responsible for the materially false and misleading
made in the Prospectus, and three underwriters of Digital River's Offering, who engaged in a
conduct to surreptitiously extract inflated commissions greater than those disclosed in the Offering
materials, among other acts of misconduct.
SNIPPETS:
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
Plaintiff, by his undersigned attorneys, individually and on behalf of the Class described
other things, a review of public announcements made by defendants, Securities and Exchange
Commission filings made by defendants, and press releases, and media reports, except as to
This is a securities class action alleging that the Registration Statement dated June 8,
1998 and the Prospectus August 11, 1998 for the issuance and initial public offering of
shares of Digital River, Inc. common stock,
The Registration Statement and Prospectus
who were responsible for the materially false and misleading statements
issued to the investing public 3,000,000 shares of common stock at a price of $8.50 per share.
Defendant FleetBoston Robertson Stephens was,
At all relevant times, Robertson Stephens had a duty to
Defendant Bear, Stearns & Co., Inc. was, at all
Defendant Joel A. Ronning was, at all relevant times, Digital River's
the common stock of Digital River pursuant or traceable to the false and misleading Prospectus
Members of the Class are so numerous that joinder of all members is impracticable.
and were controlling persons of the Company as set forth in Section 15 of the Securities Act.
If the option is exercised in full, the total Price to Public, Underwriting Discounts and
Pursuant to the Prospectus, Digital River agreed to sell the Underwriter Defendants 1,383,000
Digital River shares in the aftermarket at pre-determined prices.
commissions on transactions in Digital River securities that otherwise would have been left
undisclosed "kickbacks" for allocations in initial "hot IPOs."
The NASD is examining IPO allocation practices at several securities firms, including
misleading because they contained the following misstatements and/or omissions of material
Item 501 of Regulation S-K specifically governs the forepart of the Registration Statement
the Commission addressed reports that certain dealers participating in distributions of new
|
