Lawyers Respond To Vonage Stumble With Errors Of Their Own

Legal Issues

from the one-good-turn... dept

As the class-action lawyers smell blood at Vonage, one of the points on which the company is vulnerable is its failure to link to its prospectus in its solicitations to customers. This was a minor violation of SEC regulations, though as we noted it would likely set off the lawyers, were the IPO to go bad (which it did). Well, it seems that the lawyers aren’t immune to detail mistakes either. When they filed their initial complaint, they alleged that the investment banks received a 17% cut, far more than the usual 7%. They noted in bold that, “Investors were willing to and did pay these large underwriting fees…because investors believed that such fees were being paid, in substantial part, to assure that the underwriters had conducted a thorough analysis of the transaction.” Just one problem, the 17% was a typo made by the lawyers — the banks only got the usual 7%. Fortunately for the law firm, there’s nobody to hold their feet to the fire for such a minor mistake.