PHILADELPHIA, April 9, 2001 (PRIMEZONE) -- The law firm of Spector, Roseman & Kodroff, P.C. announces that a class action lawsuit has been commenced in the United States District Court for the Western District of Washington against defendant Amazon.com, Inc. (Nasdaq:AMZN) ("Amazon" or the "Company") on behalf of purchasers of the stock who purchased Amazon securities during the period from February 2, 2000, through March 9, 2001 (the "Class Period").
The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 promulgated thereunder. According to the complaint, defendants issued a series of materially false and misleading statements, which artificially inflated the price of Amazon securities during the Class Period. Specifically, the complaint alleges that, throughout the Class Period, Defendants touted the Company's investments in various joint ventures called Amazon Commerce Network partners ("ACNs") and the purported high margin revenue stream created by such ventures. Because of Amazon's ongoing operating losses, it was vital for the Company to demonstrate significant cash flow to the market in order to offset these losses until the Company became profitable. However, Defendants failed to disclose until the end of the Class Period that: (a) the ACN investments were losing millions of dollars; (b) much of the purported revenue recorded appeared to investors as cash, but was actually in the form of highly speculative equity investments; (c) the revenues recognized under the ACN agreements made Amazon's losses appear less than they were and distorted the Company's reported cash flow; and (d) based on its true financial condition, Amazon would face significant credit and operational issues.
Defendants' misrepresentations caused the price of Amazon securities to be artificially inflated throughout the Class Period. Defendants took advantage of this increase in Amazon's stock price to unload more than $31.5 million of their own shares. Additionally, Defendants were able to complete an offering of Amazon convertible debt priced at more than $680 million in February 2000.
If you purchased Amazon securities during the Class Period, you may, no later than May 21, 2001, move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative, chosen by the Court, that acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth. If you have sustained substantial losses in Amazon securities during the Class Period, please contact Spector, Roseman & Kodroff, P.C. at classaction@spectorandroseman.com for a more thorough explanation of the Lead Plaintiff selection process. If you have relatively small losses, your ability to participate in any recovery will be protected by the Lead Plaintiff(s), and you need take no affirmative steps at this time.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel Robert M. Roseman toll-free at 888-844-5862 or via E-mail at classaction@spectorandroseman.com. For more detailed information about the firm please visit its website at http://www.spectorandroseman.com
SPECTOR, ROSEMAN & KODROFF, P.C., located in Philadelphia and San Diego, concentrates its practice in complex litigation including actions dealing with securities laws, antitrust, contract and commercial claims. The firm is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm as lead counsel in numerous major class actions involving violations of the federal securities laws and the federal antitrust laws, and consumer fraud. As a result of the efforts of the firm and its members, hundreds of millions of dollars have been recovered on behalf of thousands of defrauded shareholders and companies.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.