This article was originally published in The Tan Sheet
Shareholders lawsuit alleges firm violated securities law by selling common stock pursuant to e-tailer's IPO without disclosing some underwriters solicited and received "excessive and undisclosed" commissions from investors. Complaint filed June 27 in Manhattan federal court by Stull, Stull & Brody alleges existence of "laddering scheme" in which underwriters allocated shares to customers at IPO price of $18 in exchange for investors' agreement to purchase additional shares at progressively higher prices, thereby artificially inflating share price. Suit seeks damages on behalf of class of shareholders who purchased drugstore.com stock between July 28, 1999 and June 15. E-tailer declined comment
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