The suit alleges that the bank underpriced the share offering and claims that the firm took kickbacks from clients who profited when the shares took off. The shares were priced by Goldman at $20. They closed on the first day of trading at $76.56, having reached $85 intra-day.
The Guardian quotes Stanley Grossman, the lawyer acting for eToys, who said that the company trusted the firm's judgement and as a result suffered 'hundreds of millions of dollars in damages and eventually had to declare bankruptcy.'
Goldman has not commented on the lawsuit.
Goldman Sued By EToys
The Guardian reports that bankrupt online retailer eToys has filed a lawsuit against Goldman Sachs alleging that the firm mishandled its 1999 market flotation.
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