Law Firm Stull, Stull & Brody Announces Class Action Lawsuit Against Stamps.com, Inc.

Business Editors & Legal Writers

NEW YORK--(BUSINESS WIRE)--June 6, 2001

Notice is hereby given that a class action lawsuit was filed on June 6, 2001, in the United States District Court for the Southern District of New York, on behalf of purchasers of Stamps.com, Inc. ("Stamps.com")

The complaint alleges that defendant Stamps.com, Inc. and certain of its current and former officers and directors violated the federal securities laws by issuing and selling Stamps.com common stock pursuant to the IPO and secondary offering without disclosing to investors that at least one of the lead underwriters in the IPO had solicited and received excessive and undisclosed commissions from certain investors.

The complaint alleges that, in exchange for the excessive commissions, lead underwriter BancBoston Robertson Stephens, Inc. allocated Stamps.com shares to customers at the IPO price of $11.00 per share. To receive the allocations (i.e., the ability to purchase shares) at $11.00, the aforementioned defendant underwriter's 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 Stamps.com stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive Stamps.com's share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the underwriter and its customers to reap enormous profits by buying Stamps.com stock at the $11.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $45.81 during its first day of trading. The complaint further alleges that Stamps.com was able to price the secondary offering of Stamps.com stock at an artificially high $65.00 per share due to the continued effects of the foregoing violations.

The complaint alleges that, rather than allowing its customers to keep their profits from the IPO, the aforementioned defendant lead underwriter required its 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 Prospectuses distributed to investors and the Registration Statements filed with the SEC in order to gain regulatory approval for the Stamps.com offerings contained material misstatements regarding the commissions that the underwriters would derive from the IPO and secondary offering and failed to disclose the additional commissions and "laddering" scheme discussed above.

Plaintiff seeks to recover damages on behalf of class members and is represented by, among others, the law firm of Stull, Stull & Brody. Stull, Stull & Brody has litigated many class actions for violations of securities laws in federal courts over the past 25 years and has obtained court approval of substantial settlements on numerous occasions.

If you bought the common stock of Stamps.com between June 24, 1999 and May 16, 2001 you may, no later than July 17, 2001, request the Court appoint you as lead plaintiff.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Tzivia Brody, Esq. at Stull, Stull & Brody by calling toll-free 1-800-337-4983, or by e-mail at SSBNY@aol.com, or by fax at 212/490-2022, or by writing to Stull, Stull & Brody, 6 East 45th Street, New York, NY 10017.