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Class-Action Suit Names MP3.com

September 20, 2000|P.J. HUFFSTUTTER

MP3.com Inc.'s legal troubles continued to mount Tuesday, as San Diego class-action specialist Milberg Weiss Bershad Hynes & Lerach filed a class-action suit against the controversial online music firm, its chief executive and members of its board of directors.

The lawsuit, in federal court in San Diego, alleges that the company made "false and misleading" statements between Jan. 13 and Sept. 7 regarding its sales and growth of its Internet services.

On Sept. 7, U.S. District Judge Jed S. Rakoff in New York ruled that the San Diego-based company had violated the copyrights of Universal Music Group, the world's largest record conglomerate. Rakoff ordered MP3.com to pay $25,000 for every Universal CD illegally posted on its My.MP3.com service, or at least $117 million. The company is appealing the decision.

The suit says MP3.com's "willful illegal acts . . . [will cause] its financial results to be much worse than earlier forecast and that MP3.com would be the subject of a potentially lethal damage award."

The suit named as co-defendants Chief Executive Michael L. Robertson, President Robin D. Richards, Chief Financial Officer Paul H. Ouyang and General Counsel Steven M. Przesmicki. Company officials and Milberg Weiss could not be reached for comment Tuesday.

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