Class Action Suit Filed Against L90

NEW YORK — Certain L90 officers allegedly misrepresented the true prospects of the company in an effort to boost the price of its stock, according to a complaint filed Thursday in the United States District Court for the Central District of California.

The class action suit was filed by the law firm of Cauley Geller Bowman & Coates on behalf of purchasers of L90 common stock during the period between July 26, 2001 and March 12. It is one of a number of class action suits that have commenced since the Lost Angeles-based online media and direct-marketing company became the subject of an SEC probe.

The complaint charges that “the defendants misrepresented L90’s true prospects in an effort to conceal L90’s improper acts until they were able to conceal their fraud by selling the company to a third party.” L90 allegedly engaged in improper transactions with Homestore.com, according to the complaint, in order to overstate revenues and assets in its second and third quarters of 2001.

L90 did not return calls by press time.

The Securities and Exchange Commission began an investigation into L90’s financial records in early February—a move that prompted eUniverse to call off its proposed merger with L90 [IQ Daily Briefing, March 12]. Two weeks ago, L90 said it was conducting its own internal investigation primarily focused on two transactions between the company and Homestore.com in the second and third quarters of last year [IQ Daily Briefing, March 13].