The Regents - University of California | Office of The President
The Regents - University of California | Office of The President
The Regents - University of California | Office of The President
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
1<br />
2<br />
3<br />
4<br />
5<br />
6<br />
7<br />
8<br />
9<br />
10<br />
11<br />
12<br />
13<br />
14<br />
15<br />
16<br />
17<br />
18<br />
19<br />
20<br />
21<br />
22<br />
23<br />
24<br />
25<br />
26<br />
27<br />
28<br />
249. On May 19, 2000, WorldCom “completed the pricing <strong>of</strong> a public debt<br />
<strong>of</strong>fering <strong>of</strong> $5.0 billion principal amount <strong>of</strong> debt securities. <strong>The</strong> net proceeds,<br />
which are anticipated to be paid on May 24, 2000, are expected to be<br />
approximately $4.95 billion and will be used to pay down commercial paper.”<br />
WorldCom’s 8-K filed on May 22, 2000.<br />
250. <strong>The</strong> Registration statements, at the time they were issued and became<br />
effective, were inaccurate and misleading, contained untrue statements <strong>of</strong> material<br />
fact and/or omitted to state material facts necessary to make the statements made<br />
therein not misleading, as set forth above.<br />
251. In their role as underwriters, Salomon was responsible for the<br />
contents and dissemination <strong>of</strong> the Registration statement, it made representations<br />
and omitted material facts to investors about the <strong>of</strong>fering, and is liable for any<br />
material misrepresentations or omissions contained therein. Based on its due<br />
diligence in investigating WorldCom’s financial condition before extending<br />
WorldCom credit, and in its roles as advisors and investment bankers, Salomon<br />
knew that the statements contained in the Registration statements were not true,<br />
that it omitted any material fact, and were materially misleading. Salomon knew<br />
that investors would be misled when they purchased WorldCom’s stock, but<br />
nevertheless made the misrepresentations to sell the stock.<br />
B. Public Offering May 2001<br />
252. Although the first public <strong>of</strong>fering was successful, WorldCom’s need<br />
for cash continued to grow. On May 9, 2001, WorldCom entered into an<br />
underwriting agreement with, among others, defendant Salomon. Salomon was<br />
lead manager and one <strong>of</strong> the joint book-runners.<br />
253. According to an 8-K filed May 16, 2001, on May 9, 2001,<br />
WorldCom, Inc. completed the pricing <strong>of</strong> a public debt <strong>of</strong>fering <strong>of</strong> approximately<br />
$11.9 billion principal amount <strong>of</strong> debt securities, <strong>The</strong> net proceeds <strong>of</strong> $11.7<br />
billion were to be used for general corporate purposes, including repaying notes.<br />
83<br />
COMPLAINT
Change language