Shareholders filed a class action lawsuit against Amazon, contending Amazon issued misleading statements that inflated its stock price.
The law firm of Spector, Roseman & Kodroff, P.C. filed a class action lawsuit against Amazon.com Inc. on behalf of those who purchased Amazon securities from Feb. 2, 2000 through March 9, 2001. This is the second such suit filed against Amazon this month. According to the complaint, defendants issued a series of materially false and misleading statements that artificially inflated the price of Amazon securities during the 13-month period.
Defendants specifically point to Amazon`s investments in Amazon Commerce Network partners and the purported high-margin revenue stream created by such ventures. The suit alleges Amazon failed to disclose until the end of the 13 months that the ACN investments were losing millions of dollars; much of the purported revenue recorded appeared to investors as cash, but was actually in the form of what the suit described as “highly speculative” equity investments; 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 based on its true financial condition Amazon would face significant credit and operational issues.