UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
HELENE BRODY, on behalf of herself and all others X
similarly situated, :: Index No.
Plaintiff, :: CLASS ACTION COMPLAINT
FOR VIOLATIONS OF THE
vs. :: FEDERAL SECURITIES
LAWS
MORGAN STANLEY & CO., INCORPORATED. :
and GOLDMAN SACHS & CO., :::
Defendants. ::X
Plaintiff, by her 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 the defendants named
herein, and alleges as follows:
SUMMARY OF ACTION
1. This is a securities class action alleging that the Registration Statement and the
Prospectus dated February 10, 1999 for the issuance and initial public offering of 5,000,000
shares of Healtheon Corporation ("Healtheon" or the "Company") common stock (the"Offering"),
contained material misrepresentations and/or omissions. The Offering consisted of 4,000,000
shares offered in the United States and 1,000,000 shares offered internationally. On November
15, 1999, Healtheon changed its name to Healtheon/WebMD Corporation and effective
September 15, 2000, the Company changed its name to WebMD Corporation. The Registration
Statement and Prospectus are referred to herein collectively as the "Prospectus."
2. Healtheon purports to provide connectivity and a full suite of services to the
SNIPPETS:
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
Plaintiff, by her 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 the
Prospectus dated February 10, 1999 for the issuance and initial public offering of 5,000,000
shares of Healtheon Corporation common stock,
contained material misrepresentations and/or omissions.
shares offered in the United States and 1,000,000 shares offered internationally.
materials,
of the Securities Exchange Act of 1934,
Plaintiff Helene Brody purchased shares of Healtheon during the Class Period.
registered broker-dealer and member of the NASD.
Healtheon Corporation is offering shares of its common stock.
This is our initial public offering and no public market currently exists for our shares.
We have requested that the underwriters reserve up to 837,500 shares to be offered to the
discounts and commissions of $.56 per share, or a total of $2,800,000, based on the spread
between the per share proceeds to Healtheon and the Offering price to the public ($8.00
huge profits by reselling the shares at much higher prices in the aftermarket.
agreed to and did pay defendants excessive commissions on transactions in other securities
The NASD is examining IPO allocation practices at several securities firms, including
Defendant's False and Misleading Statements
Regulation S-K specifically governs the forepart of the Registration Statement and outside
untrue statements of material fact and/or omitted to state material facts necessary to make
Such defendants' material misrepresentations and/or omissions were done
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