Barrack, Rodos & Bacine has filed a class action lawsuit against Bidz.com and its chief executive, claiming they violated the U.S. securities laws.

Filing the lawsuit in the United States District Court for the Central District of California, the plaintiffs represent Bidz.com stockholders.

They allege that Bidz.com made false and misleading statements which led investors to falsely regard Bidz.com as a well-run and financially sound company, when in reality the company had substantial problems.

When news of Bidz.com problems hit the media in November 2007 the stock price dropped, resulting in substantial losses for investors. Now the plaintiffs are seeking damages from Bidz.com and its CEO.

I wonder whether we will see more of these kinds of lawsuits as the recession hits more companies… and their investors.

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This entry was posted on Monday, May 11th, 2009 at 6:00 pm and is filed under Ecommerce, Law, News and Comment. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.