According to a press release dated July 18, 2001, the complaint charges defendants with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 for issuing a Registration Statement and Prospectus (the'Prospectus') that contained materially false and misleading information and failed to disclose material information. The Prospectus was issued in connection with Critical Path's initial public offering of 4.5 million shares of common stock at $24.00 per share that was completed on or about March 29, 1999 (the 'IPO').
More specifically, the complaint charges defendants with 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. The complaint alleges that on or about March 29, 1999, Critical Path commenced an initial public offering of 4.5 million of its shares of common stock at an offering price of $24.00 per share (the 'Critical Path IPO'). In connection therewith, Critical Path 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) the Underwriter Defendants (Robertson Stephens, Dain Rauscher and Hambrecht & Quist) had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the Underwriter Defendants allocated to those investors material portions of the restricted number of Critical Path shares issued in connection with the Critical Path IPO; and (ii) the Underwriter Defendants had entered into agreements with customers whereby the Underwriter Defendants agreed to allocate Critical Path shares to those customers in the Critical Path IPO in exchange for which the customers agreed to purchase additional Critical Path shares in the aftermarket at pre- determined prices.