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Shareholder Sues NextCard, Execs

November 06, 2001|Bloomberg News

A NextCard Inc. shareholder sued the largest Internet credit card issuer and its officers, accusing them of trying to profit by misleading investors about the company's prospects for 2000 and 2001.

NextCard Chief Executive John Hashman, Chairman Jeremy Lent, President Yinzi Cai and board member Safi Qureshey artificially inflated the stock so they could sell their shares for $9million, Russell Ballati alleged in papers filed in San Francisco federal court.

The officials' stock sales "were out of line with their prior trading history," Ballati alleges in the suit, which seeks class status for investors who bought shares between March 30, 2000, and Oct. 30, 2001.

Ballati wants to recover damages on behalf of shareholders.

NextCard shares fell 84% to close at 87 cents Wednesday after the company said more borrowers defaulted on loans and regulators want it to put aside more money for bad debt. The shares rose 1 cent on Monday to close at 83 cents on Nasdaq.

Officials at San Francisco-based NextCard didn't immediately return calls seeking comment.

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