Shareholders in Amazon.com and eBay have filed lawsuits against
Morgan Stanley Dean Witter and its high-profile internet analyst
Mary Meeker. The complaints charge Morgan Stanley and Meeker with
issuing false and misleading statements and failing to disclose
material information concerning Meeker’s true relationship with the
companies.
Morgan Stanley provided investment banking services to both
Amazon.com and eBay during certain periods in question. The
shareholders allege that Meeker was principally employed to attract
investment banking customers to Morgan Stanley, but that this was
not publicly disclosed. They argue that owing to her role in
attracting and retaining clients, Meeker failed to base her advice
for the companies on objective analyses and that the amount of
compensation she received was directly tied to the volume of
business she generated for Morgan Stanley.
In addition to these allegations, the shareholders claim that
Meeker’s improper conduct allowed her to purportedly earn $15
million in 1999 alone. They also maintain that because Morgan
Stanley failed to fully disclose its activities, they purchased
stock in the companies at inflated prices.
Morgan Stanley has made no official response to the
allegations.
