The complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about April 8, 1999, Value America
commenced an initial public offering of 5,500,000 of its shares of common stock at an offering price of $23.00 per share (the "Value America IPO"). In
connection therewith, Value America filed a registration statement, which
incorporated a prospectus (the "Prospectus"), with the SEC. The complaint
further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) Robertson Stephens had solicited and received excessive and undisclosed commissions from certain investors in exchange for which Robertson Stephens allocated to those investors material portions of the restricted number of Value America shares issued in connection with the Value America IPO; and (ii) Robertson Stephens had entered
into agreements with customers whereby Robertson Stephens agreed to allocate Value America shares to those customers in the Value America IPO in exchange for which the customers agreed to purchase additional Value America shares in the aftermarket at pre-determined prices.