A class action lawsuit has been filed in the United States District Court for the Central District of California on behalf of purchasers of Asia Global Crossing, Ltd. (OTC:ASGXF.OB) common stock pursuant to the Company’s October 6, 2000 initial public offering ("IPO").
The Complaint charges that defendants violated Sections 11 and 12(a)(2) of the Securities Exchange Act of 1933. The action arises from damages incurred by the Class as a result of a scheme and common course of conduct by defendants which operated as a fraud and deceit on the Class. Asia Global Crossing, Ltd. operates a worldwide fiber optic network and provides global internet, data and voice services to wholesale and business customers.
According to the complaint, defendants were aware before the IPO that there was a worldwide glut in available fiber optic capacity. Plaintiff alleges that defendants were aware of this glut and knew that Asia Global could never meet its targets. Instead, defendants went ahead with the IPO of Asia Global and issued a prospectus containing materially false and misleading statements about the Company’s business and financial condition. Consequently, investors who purchased on the IPO purchased Asia Global’s stock at artificially inflated prices.