OKLAHOMA CITY, Aug. 31, 2001 (PRIMEZONE) -- Federman & Sherwood announced the filing of a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of Loudeye Technologies, Inc. ("Loudeye" or the "Company") (Nasdaq:LOUD) securities between March 15, 2000 and Dec. 6, 2000, inclusive (the "Class Period"), against defendants Loudeye, certain of its officers and directors, and its underwriters.
The complaint alleges that defendants violated the federal securities laws by issuing and selling Loudeye common stock pursuant to the March 15, 2000 IPO without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors.
Specifically, the complaint alleges that in exchange for the excessive commissions, defendants allocated Loudeye shares to customers at the IPO price. To receive the allocations (i.e., the ability to purchase shares) at the IPO price, the underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Loudeye stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive Loudeye's share price up to artificially high levels. This artificial price inflation enabled both the underwriters and their customers to reap enormous profits by buying stock at the IPO price and then selling it later for profit at inflated aftermarket prices.
If you purchased Loudeye securities during the Class Period, you may request that the Court appoint you as lead plaintiff by Sept. 24, 2001.
If you have any questions about this Notice, the action, your rights, or your interests, please e-mail us at wFederman@aol.com or contact:
William B. Federman FEDERMAN & SHERWOOD 120 N. Robinson, Suite 2720 Oklahoma City, OK 73102 (405) 235-1560/FAX: (405) 239-2112
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca