Other actions have been filed making similar allegations regarding the IPOs of more than 300 other companies. All of these have been coordinated for pretrial purposes as In re Initial Public Offering Securities Litigation, Civil Action No. 21-MC-92.

According to a Press Release dated November 27, 2001, the lawsuit asserts claims under Section 11, 12 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated by the SEC thereunder and seeks to recover damages. The complaint alleges that Foundry Networks and certain of its officers at the time of its IPO violated the federal securities laws by issuing and selling Foundry Networks common stock pursuant to the initial public offering without disclosing to investors that several of the underwriters of the IPO had solicited and received excessive and undisclosed commissions from certain investors. In exchange for the excessive commissions, the complaint alleges, defendant allocated Foundry Networks shares to customers at the IPO price of $12.50 per share. To receive the allocations (i.e., the ability to purchase shares) at $12.50, the defendant 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 Foundry Networks stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive Foundry's share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the defendant underwriters and their customers to reap enormous profits by buying Foundry Networks stock at the $12.50 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $83.28 during its first day of trading. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the defendant underwriters required their customers to "kick back" some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. 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 Foundry Networks offering contained material misstatements regarding the commissions that the defendant underwriters would derive from the IPO and failed to disclose the additional commissions and "laddering" scheme discussed above.