InfoSpace Filed Motion To Dismiss Litigation
DOW JONES NEWSWIRES
BELLEVUE, Wash. -- InfoSpace Inc. (INSP) said an amended class action complaint against the company doesn't represent new litigation, but adds Merrill Lynch & Co. (MER) as a defendant to an earlier lawsuit.
In a press release Tuesday, the software provider said the amendment adds Merrill Lynch as a defendant to a consolidated class action suit pending in U.S. District Court for the Western District of Washington.
InfoSpace plans to vigorously defend itself, and recently filed a motion to dismiss the suit. The company said it does not believe the additional allegations involving Merrill alter the fundamental weaknesses of the plaintiffs' claims.
The Wall Street Journal reported Tuesday that Cohen Milstein Hausfeld & Toll is co-lead counsel for five plaintiffs who sued Merrill and analyst Henry Blodget in July, alleging that they violated federal securities laws by pumping up the stock of InfoSpace.
Blodget, a former star analyst for Merrill, has been under scrutiny for conflict of interest issues as Merrill has been questioned for hyping stocks in efforts to win investment banking work.
On April 8, New York State Attorney General Elliott Spitzer said he obtained a court order requiring Merrill to overhaul the means by which its analysts issue stock ratings on corporate clients. Merrill's analysts were determined to have helped recruit new investment banking clients, tainting the investment advice.
An incident cited by Spitzer occured in the fall of 2000 and included InfoSpace, a major Merrill investment banking client. In an internal e-mail at Merrill, an unidentified analyst termed InfoSpace a "piece of junk," yet went on to give InfoSpace the firm's highest stock rating.
In recent Nasdaq trading, InfoSpace was down 11 cents, or 7.7%, to $1.31 on volume of 1.19 million shares. Average daily volume is 1.56 million shares. |
