Broadband-telephone service Vonage Holdings is facing increased legal static surrounding its recent initial public offering.
On Thursday, law firm Pomerantz Haudek Block Grossman & Gross announced that it was filing a class-action lawsuit in the U.S. District Court, District of New Jersey against Vonage on behalf of investors who bought stock during the company’s May 23 initial public offering.
The suit alleged that Vonage violated the U.S. Securities Act by failing to disclose to potential investors that its technology had problems funneling voice and data traffic over certain service providers’ networks, including AOL, and that Vonage's voice-over-Internet-protocol technology doesn’t allow for fax transmissions.
The suit also claimed that Vonage did not adequately inform customers who opened brokerage accounts and participated in its “Directed Share Program” about obligations to purchase allocated shares.
And it alleged that Vonage’s IPO violated the Securities Act because its e-mails to prospective investors did not include an active hyperlink to the company’s prospectus, which contained its most recently filed registration statement.
Nevertheless, the company continues to plow forward, despite the fact that its share price has dropped from an initial $17 to about $9 as of Thursday.
On Thursday the company introduced “V-Phone,” a portable universal-serial-bus device that allows customers to access their voice service remotely (www.multichannel.com/article/CA6348584.html?display=Breaking+News). The V-Phone device plugs into any laptop or PC with a high-speed broadband connection and users can make telephone calls with an included stereo earpiece microphone.
And Friday, the company promoted Timothy Smith to interim president of Vonage Network, replacing Louis Mamakos. Mamakos, who has served a dual role as chief technology officer and president, will concentrate on his role as CTO.
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