The Regents - University of California | Office of The President

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
This was the largest public offering to date. The underwriters received about $70
million.
254. The Registration statement included incorporation of WorldCom’s
10-K for fiscal year end 2000 including Andersen’s unqualified audit opinion and
WorldCom’s first quarter 2001 10-Q. These defendants consented to their name
being used in Proxy Statements. As such, they participated in the solicitation,
offering, and sale of the notes to the investing public pursuant to the Registration
statements.
255. The Registration statements, at the time they were issued and became
effective, were inaccurate and misleading, contained untrue statements of material
fact and/or omitted to state material facts necessary to make the statements made
therein not misleading, as set forth above.
256. Due to their role as underwriters, Salomon was responsible for the
contents and dissemination of the Registration statement, it made representations
and omitted material facts to investors about the offering, and is liable for any
material misrepresentations or omissions contained therein. Based upon its due
diligence in investigating WorldCom’s financial condition before extending
WorldCom credit, and in its roles as advisors and investment bankers, Salomon
knew that the statements contained in the Registration statements were not true,
that it omitted any material fact, and were materially misleading. It knew that
investors would be misled when they purchased WorldCom’s stock, but
nevertheless made the misrepresentations to sell the stock.
FIRST CAUSE OF ACTION
(Against All Defendants)
VIOLATION OF CALIFORNIA CORPORATIONS CODE §25400
257. Plaintiff hereby incorporates by reference each of the foregoing
paragraphs.
84
COMPLAINT