Case Page

 

Case Status:    SETTLED
On or around 10/06/2009 (Date of order of final judgment)

Filing Date: July 06, 2001

The complaint alleges that, in exchange for the excessive commissions, members of the underwriting group Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith Barney Inc., Hambrecht & Quist LLC and Thomas Weisel Partners LLC allocated Rhythms Netconnections shares to customers at the IPO price of $21.00 per share. To receive the allocations (i.e., the ability to purchase shares) at $21.00, 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 Rhythms Netconnections stock rocketed upward (a practice known on Wall Street as ``laddering'') was intended to (and did) drive Rhythms Netconnections' share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the underwriters and their customers to reap enormous profits by buying stock at the $21.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $75 on its first day of trading, and subsequently rose to a peak high of $111.50 on April 13, 1999.The complaint further alleges that defendants violated the Securities Act of 1933 because the Prospectus distributed to investors and the Registration Statement filed with the SEC in order to gain regulatory approval for the Rhythms Netconnections offering contained material misstatements regarding the commissions that the underwriters would derive from the IPO transaction and failed to disclose the additional commissions and ``laddering'' scheme discussed above.

COMPANY INFORMATION:

Sector: Services
Industry: Communications Services
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: RTHM
Company Market: NASDAQ
Market Status: OTC

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 01-CV-06128
JUDGE: Hon. Shira A. Scheindlin
DATE FILED: 07/06/2001
CLASS PERIOD START: 04/06/1999
CLASS PERIOD END: 07/05/2001
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernstein Liebhard & Lifshitz, LLP (New York)
    10 E. 40th Street, 22nd Floor, Bernstein Liebhard & Lifshitz, LLP (New York), NY 10016
    800.217.1522 · info@bernlieb.com
  2. Johnson & Perkinson
    1690 Williston Road, Johnson & Perkinson, VT 05403
    802.862.0030 802.862.0060 · JPLAW@adelphia.net
  3. Lovell Stewart Halebian LLP (former New York)
    500 Fifth Avenue, Lovell Stewart Halebian LLP (former New York), NY 10110
    212.608.1900 212.719.4677 · info@lshllp.com
  4. Stoll, Stoll, Berne, Lokting & Schlachter
    209 South West Oak Street, Stoll, Stoll, Berne, Lokting & Schlachter, OR 97204
    503.227.1600 503.227.6840 · info@ssbls.com
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 01-CV-06128
JUDGE: Hon. Shira A. Scheindlin
DATE FILED: 05/08/2002
CLASS PERIOD START: 04/06/1999
CLASS PERIOD END: 12/06/2000
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernstein Liebhard & Lifshitz, LLP (New York)
    10 E. 40th Street, 22nd Floor, Bernstein Liebhard & Lifshitz, LLP (New York), NY 10016
    800.217.1522 · info@bernlieb.com
  2. Milberg Weiss Bershad & Schulman LLP (New York)
    One Pennsylvania Plaza, 49th Floor, Milberg Weiss Bershad & Schulman LLP (New York), NY 10119
    212.594.5300 212.868.1229 · info@milbergweiss.com
  3. Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY)
    One Pennsylvania Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY), NY 10119-1065
    212.594.5300 ·
  4. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
  5. Sirota & Sirota LLP
    110 Wall Street 21st Floor, Sirota & Sirota LLP, NY 10005
    888.759.2990 212.425.9093 · Info@SirotaLaw.com
  6. Stull, Stull & Brody (New York)
    6 East 45th Street, Stull, Stull & Brody (New York), NY 10017
    310.209.2468 310.209.2087 · SSBNY@aol.com
  7. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
    270 Madison Avenue, Wolf Haldenstein Adler Freeman & Herz LLP (New York), NY 10016
    212.545.4600 212.686.0114 · newyork@whafh.com
No Document Title Filing Date
No Document Title Filing Date