No. 8
Friday January 7, 5:23 pm Eastern Time
Company Press Release
SOURCE: Shapiro Haber & Urmy LLP
Shapiro Haber & Urmy LLP Brings Class
Action Against FreeMarkets, Inc. On Behalf of Purchasers of
FMKT Securities From 12/10/99 to 1/4/2000
BOSTON, Jan. 7 /PRNewswire/ -- A class action suit alleging securities fraud has been filed in the United States
District Court for the Western District of Pennsylvania against FreeMarkets, Inc. (Nasdaq: FMKT - news;
''FreeMarkets'' or the ''Company'') and certain of its officers and directors, by the Boston law firm Shapiro
Haber & Urmy LLP. The case was filed on behalf of all persons who purchased FreeMarkets common stock
during the period December 10, 1999 through January 4, 2000, inclusive (the ''Class Period'').
The complaint charges the defendants with violations of Section 10(b) of the Securities Exchange Act of 1934
and Rule 10b-5 promulgated thereunder and Section 20(a) of the Exchange Act.
As alleged in the Complaint, FreeMarkets creates customized business-to- business, Internet on-line auctions for
buyers of industrial parts, raw materials and commodities. Following FreeMarkets' Initial Public Offering
(''IPO'') of 3.6 million shares of its common stock at $48 per share on December 10, 1999, the price of the
Company's common stock soared to as high as $370 per share on January 3, 2000. On January 4, 2000,
however, FreeMarkets rushed out an announcement disclosing that General Motors Corporation (''GM''), one
of its two largest customers, was canceling its agreement with the Company, after Bloomberg publicized the
comments made by a GM executive that it was switching all of its on-line auction business from FreeMarkets to
Commerce One. The fact that the defendants knew that GM had entered into an agreement to set up an on-line
auction site with the Company's chief competitor, Commerce One, prior to the IPO and that they confirmed the
cancellation of GM's agreement with the Company only after that information was made generally known to the
public, supports a strong inference that the defendants knew prior to the IPO that GM would terminate its
relationship with FreeMarkets in the first quarter of 2000. Moreover, they knew that the disclosure of the
expected cancellation of GM's agreement with the Company in its Registration Statement and Prospectus issued
in connection with the IPO on December 10, 1999 would ruin FreeMarkets' chances of raising $160 million by
going public. The defendants therefore sought to conceal the news that GM's termination of its relationship with
FreeMarkets was imminent until after the IPO. As a result of the defendants' false statements and/or omissions,
FreeMarkets common stock traded at artificially inflated prices during the Class Period, soaring to $350 per
share at the close of trading on January 3, 2000 before plummeting almost 20% to close at $278.50 per share on
January 4, 2000 in heavy trading.
Plaintiff seeks to recover damages suffered by class members and are represented by the law firm of Shapiro
Haber & Urmy LLP, a Boston firm, which has extensive experience and expertise in prosecuting securities class
actions on behalf of defrauded investors. More information about the firm and its qualifications is available on the
firm's website at www.shulaw.com.
If you are a member of the class described above, you may wish to join the action. You may move the court to
serve as a lead plaintiff no later than sixty days from January 5, 2000.
If you would like a copy of the complaint, or if you would like to discuss this action, or have any questions
concerning this notice or your rights with respect to this matter, you may contact Thomas Shapiro, Esq. or Lisa
Palin, paralegal, Shapiro Haber & Urmy LLP, 75 State Street, Boston, MA 02109, (800) 287-8119, fax at
(617) 439-0134, or e-mail at cases@shulaw.com.
You may also contact Richard A. Finberg, Malakoff Doyle & Finberg, P.C., Suite 200, The Frick Building,
Pittsburgh, PA 15219, (412) 281-8400, fax at (412) 281-3262.
|
