Ralph M. Stone (RS-4488)
SHALOV STONE & BONNER LLP
485 Seventh Avenue, Suite 1000
New York, New York 10018
(212) 239-4340
Fax (212) 239-4310
Sanford P. Dumain (SD-8712)MILBERG WEISS BERSHAD HYNES & LERACH LLP
One Penn Plaza, 49th Floor
New York, New York 10119(212) 594-5300
Co-Lead Counselfor Plaintiffs
UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK
x
In re CRAYFISH COMPANY SECURITIESLITIGATION
Master File No.
00 Civ. 6766 (DAB)
This Document Relates to : All Actions• a
"at^1`?
CONSOLIDATED AMENDED CLASS ACTION COMPLAINT
Plaintiffs , by their attorneys , make the following allegations upon information and belief
(except as to the allegations specifically pertaining to the named plaintiffs and their counsel),
based upon the facts alleged below, which are predicated upon, inter alia, a review and analysis
of relevant filings made by or on behalf of Crayfish Co., Ltd. ("Crayfish" or the "Company")
with the Securities and Exchange Commission ("SEC"), press releases, news and analyst reports,
and an investigation undertaken by plaintiffs' counsel and its experts. Plaintiffs believe that
further substantial evidentiary support will exist for the allegations set forth below after a
reasonable opportunity for discovery.
JURISDICTIONAND VENUE
1. The claims asserted herein arise under and pursuant to Sections 11, 12(a)2 and 15
of the Securities Act of 1933, as amended (the "Securities Act") [15 U.S.C. §§ 77k, 771(a)(2) and
77o].
2. This Court has jurisdiction of this action pursuant to Section 22 of the Securities
Act [15 U.S.C. § 77v].
3. Venue is properly laid in this judicial district pursuant to Section 22 of the
Securities Act. The acts and conduct complained of, including the preparation , issuance and
dissemination of materially false and misleading information to the investing public, occurred in
substantial part in this judicial district.
PARTIES
4. Lead Plaintiffs Jenny Chang, Toshihiko Hagiwara, Toru Nakamichi, Meng Lin
Sun, Leslie Helm, Dennis Varga and Esther Wilhelm purchased Crayfish (defined below) shares,
pursuant to the Prospectus (defined below), on or traceable to the initial public offering of
Crayfish shares, and suffered damages.
5. Defendant Crayfish Co. ("Crayfish" or the "Company") is a provider of Internet
electronic mail services to small- and medium-sized businesses in Japan . Crayfish is organized
under the laws of Japan and maintains its corporate headquarters in Tokyo, Japan. Commencing
on or about March 8, 2000, there was an initial public offering of 4,350,000 American
Depositary Shares (ADS's) of Crayfish (the "Offering"). At the time of the Offering, each ADS
represented 1/5000th of a share of Crayfish common stock. (The ratio of shares per ADS was
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subsequently changed by Crayfish in December 2000, following the collapse of its share price, in
order to maintain its NASDAQ listing.)
6. Defendant Isao Matsushima ("Matsushima") was at all relevant times Chief
Executive Officer, President and Representative Director of the Company. Defendant
Matsushima is and at all relevant times was also an Advisor to defendant Hikari Tsushin, Inc.
Defendant Matsushima is one of four "selling shareholders" who sold in the aggregate 130
shares (or the equivalent of 650,000 ADS's) for total proceeds of approximately $15 million.
7. Defendants Morgan Stanley Dean Witter, Nomura Securities International, Inc.,
and Merrill Lynch & Co. (collectively, the "Underwriter Defendants") substantially participated
in the commission of the wrongs alleged herein through their involvement in the Offering of
Crayfish shares. The Underwriter Defendants were at all times entities engaged in the business
of investment banking, underwriting and selling securities to the public. The Underwriter
Defendants were co-lead underwriters of the Offering, for which they received substantial fees.
8. Defendant Hikari Tsushin, Inc. is a diversified Japanese company engaged in
numerous investment activities. At all relevant times, Hikari Tsushin was a controlling person
of Crayfish, within the meaning of Section 15 of the Securities Act, controlling a controlling
block of its shareholdings, through various contractual arrangements, and as a result of other
relationships between Hikari Tsushin and Crayfish. As the Prospectus notes at page 56, "As a
result [of various factors], Hikari Tsushin will have the power to substantially influence our
business decisions."
PLAINTIFFS' CLASSACTIONALLEGA TIONS
9. Plaintiffs bring this action as a class action pursuant to Fed. R. Civ. P. 23, on
behalf of themselves and on behalf of all persons who (a) purchased Crayfish shares on or
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traceable to the Offering (the "Section 11 subclass"), and/or (b) purchased Crayfish shares in the
Offering (the "Section 12 subclass"). The above-described subclasses are referred to collectively
herein as the "Class." Excluded from the Class are defendants herein, members of the
immediate family of each of the defendants, any person, firm, trust, corporation, officer, director
or other individual or entity in which any defendant has a controlling interest or which is related
to or affiliated with any of the defendants, and the legal representatives, agents, affiliates, heirs,
successors-in-interest or assigns of any such excluded party.
10. The members of the Class are so numerous that joinder of all members is
impracticable. Crayfish and certain selling shareholders sold 4,350,000 American Depositary
Shares of Crayfish stock to members of the investing public commencing on or about March 8,
2000, at a price of $24.50 per share, and, throughout the Class Period, more than 4 million shares
of outstanding shares of Crayfish were actively traded on the NASDAQ Stock Market. The
precise number of class members is unknown to plaintiffs at this time but class members are
believed to number in the thousands. In addition, the names and addresses of the class members
can be ascertained from the books and records of Crayfish, the Underwriter Defendants or their
agents.
11. Plaintiffs will fairly and adequately represent and protect the interests of the
members of the Class. Plaintiffs have retained competent counsel experienced in class action
litigation under the securities laws to further ensure such protection and intend to prosecute this
action vigorously.
12. Plaintiffs' claims are typical of the claims of the other members of the Class
because plaintiffs and all the class members' damages arise from and were caused by the same
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false and misleading representations and omissions made by or chargeable to defendants.
Plaintiffs do not have interests antagonistic to, or in conflict with, the Class.
13. A class action is superior to other available methods for the fair and efficient
adjudication of this controversy. Since the damages suffered by individual class members may
be relatively small, the expense and burden of individual litigation make it virtually impossible
for the class members to seek redress for the wrongful conduct alleged. Plaintiffs know of no
difficulty which will be encountered in the management of this litigation which would preclude
its maintenance as a class action.
14. Common questions of law and fact exist as to all members of the Class and
predominate over any questions affecting solely individual members of the Class. Among the
questions of law and fact common to the Class are:
(a) Whether the federal securities laws were violated by defendants' acts as
alleged herein;
(b) Whether the prospectus, registration statement, documents, filings,
releases and statements disseminated by defendants to the investing public in
connection with the Offering omitted and/or misrepresented material facts about
Crayfish; and
(c) The extent of damages sustained by members of the Class and the
appropriate measure thereof.
15. The names and addresses of the record owners of the shares of Crayfish
purchased during the Class Period are available from Crayfish's transfer agent and the
underwriters to the Offering. Notice can be provided to such record owners by a combination of
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published notice and first-class mail using techniques and a form of notice similar to those
customarily used in class actions arising under the federal securities laws.
FACTUAL ALLEGATIONS
The Offering
16. On or about February 10, 2000, defendants filed with the SEC a Form F-1
Registration Statement (the "Registration Statement") for the Offering of the shares of Crayfish
stock. Defendants thereafter filed several amendments to the Registration Statement.
17. On or about March 6, 2000, the prospectus (the "Prospectus") with respect to the
Offering and which forms part of the Registration Statement became effective and, commencing
on or around that date, Crayfish thereafter sold, through the Underwriter Defendants, the
Crayfish shares being offered.
18. Crayfish and the selling shareholders, through the Underwriter Defendants, sold
4,350,000 Crayfish ADS's (including over-allotments) commencing on or about March 8, 2000,
in the Offering, at a price of $24.50 per share. The NASDAQ component of the Offering yielded
gross proceeds of approximately $106,575,000, of which $7,460,250 was paid to the
Underwriter Defendants. The Underwriter Defendants substantially participated in and
exercised control over all aspects of the Offering.
The Materially False And Misleading Prospectus
19. In addition to the numerous materially false and misleading statements and
projections made by the defendants in the weeks surrounding the commencement of the
Offering, which are described below, the Prospectus itself was materially false and misleading
for several reasons.
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20. At the time of the Offering, Crayfish was substantially owned, and throughout the
Class Period continued to be substantially owned, by Hikari Tsushin. According to the
Prospectus, Hikari Tsushin had "the power to substantially influence our [Crayfish's] business
decisions" and "Because of Hikari Tsushin's control of the majority of the shares of our common
stock, we may be deemed to be under the control of Hikari Tsushin." Prospectus at 56. The
Prospectus also stated that "We [Crayfish] consult Hikari Tsushin on important policy and
management issues and provide Hikari Tsushin with monthly reports of our financial
performance." Prospectus at 57. The Company also had several contractual relationships with
Hikari Tsushin. Prior to the Offering and throughout the Class Period, Hikari Tsushin enjoyed
an exclusive distribution relationship with Crayfish, pursuant to which Hikari Tsushin controlled
virtually all sales distribution of Crayfish email services, and received 50% of all revenues
received in the life of any such contract it sold for Crayfish. In short, Crayfish's success
depended upon Hikari Tsushin.
21. In this regard, the Prospectus states at page 2:
We market and sell our services through our agent, Hikari Tsushin.
As of December 31, 1999, Hikari Tsushin directly and indirectly
held 50.1% of our issued shares. Hikari Tsushin has an extensive
marketing and sales network and direct-marketing know-how for
targeting the small and medium-sized business market in Japan.
Hikari Tsushin set up a network of sales agents specifically for the
sales and marketing of our Hitmail and related services.
22. Although the Prospectus purports to disclose the significant relationships
between Crayfish and Hikari Tsushin, it nowhere discloses that, at the time of the Offering,
Hikari Tsushin was experiencing a massive financial downturn, which necessarily would impact
the future profitability of Crayfish. Indeed, on March 31, 2000, only 18 trading days after
Crayfish stock was sold to the public in its initial public offering, Hikari Tsushin announced a
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significant earnings shortfall that devastated its own stock price and caused Crayfish's stock
price to decline as well.
23. If there was any doubt as to the impact these financial events were to have on
Crayfish, those doubts were put to rest on April 25, 2000, when Hikari Tsushin announced that
its earnings weakness would negatively impact its selling activities for Crayfish. But, defendants
did not disclose that the seeds of this decision to reduce sales activities for Crayfish had actually
been planted many months earlier, and, as reported by the Japanese daily newspaper Yomiuri
Shimbun, by January 2000, Hikari Tsushin had instructed sales agents to downsize because by
that time "the company's (Hikari Tsushin's) financial situation was in a tailspin." Yomiuri
Shimbun, October 9, 2000, page 9. The fact that Hikari Tsushin had begun to downsize its sales
force in January 2000 was also confirmed by Crayfish in a press release dated November 21,
2000, in which Crayfish stated in pertinent part:
The reduction in the number of new subscribers acquired
compared to previous quarters was largely attributable to the
restructuring of Hikari Tsushin's sales agents force, which was
reduced in numbers from 1,200 persons to 400 persons between
January and September 2000. This resulted in a decrease in the
number of sales persons available to market hitmail and acquire
new subscribers.
Crayfish Press Release, "Crayfish Announces Results for Fiscal Year 2000 Ended September 30,
2000" dated November 21, 2000, at page 2.
24. As a result of these disclosures, which directly related to facts that existed before
the Offering but which were not disclosed to investors, and necessarily should have been
disclosed, the price of Crayfish stock has plummeted to well below $2.00 per share.
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Inadequate Risk Disclosure
25. Although the Prospectus contains boilerplate risk disclosures which purport to
warn investors about "possible" factors which "could" or "may" negatively impact Crayfish's
earnings , none of these risk disclosures actually identified the facts described above which were
in fact occurring at the time of the Offering. In addition, the Prospectus misleadingly included
forward-looking risk disclosures without disclosing that the warned-of risks were actually
occurring.
26. For example, the Prospectus offers the following purported warning on page 7:
If salespersons of Hikari Tsushin 's sales agents engage in
inappropriate sales efforts, our business may suffer.
We do not directly control salespersons of Hikari Tsushin's sales
agents, and we rely on Hikari Tsushin and its sales agents to
ensure that those salespersons conduct their sales and marketing
activities appropriately. Employment of any inappropriate sales
efforts or any other misconduct on the part of any salespersons
could materially adversely affect our business.
27. The foregoing risk warning failed to disclose that prior to and at the time of the
Offering, Hikari Tsushin sales agents had engaged in inappropriate sales and marketing
activities. For example, a Morgan Stanley Dean Witter analyst report dated August 23, 2000,
explained that many customers were cancelling their Crayfish contracts after seven to eight
months, while they could normally only do so within six months. The Morgan Stanley report
stated pertinently that, "[c]urrently, many of those cancelling their contracts originally signed
due to arguably overly aggressive sales techniques on the part of Hikari Tsushin ...." In a
November 21, 2000, press release, Crayfish provided further detail, by stating:
The increase in cancellations was due to several factors. Prior to
the restructuring of its sales force, Hikari Tsushin had relied
heavily on a large group of sales agents with whom it had
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subcontracted to market Hitmail. Many of the subscribers who
were signed on by the subcontracted agents apparently lacked real
need for the e-mail services provided by the subscription and
cancelled their subscriptions shortly after the conclusion of their
initial six-month subscription period. The restructuring of the
sales force also decreased the level of customer service and
support for subscribers, resulting in further cancellations. Hikari
ceased all Hitmail marketing efforts on behalf of the Company as
of October 31, 2000. However, it is likely that a high subscriber
cancellation rate will continue for some period of time, and
possibly for the next several months.
28. As a result of the improper and overly aggressive marketing activities of Hikari
Tsushin, numerous other statements in the Prospectus were materially false and misleading. For
example:
(a) The statement on page 34 of the Prospectus (and accompanying chart)
that "As of January 31, 2000, we had 44,811 Hitmail service customers, as counted by the
number of registered domain names." This statement was materially false and misleading
because the number of subscribers was artificially inflated as a result of improper marketing
activities that boosted near-term subscriber figures to be offset by numerous later-period
cancellations, which in fact did soar after the Offering. Likewise, the statement that the
Company had obtained 7,208 customers in January 2000 (Prospectus at 26) was similarly
inflated.
(b) The chart on page 34 of the Prospectus, which showed dramatically
increasing numbers of customers on a monthly basis, was materially false because the figures
were distorted by the improper sales activities as noted in the prior subparagraph, and the chart
was materially misleading because the chart suggested greater growth than the Company in fact
experienced.
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(c) The statement on page 38 of the Prospectus, that "We believe that our
rapid growth has solid foundations. These include: ... Our business relationships with Hiikari
Tsushin, which supports us with effective marketing ...." This statement failed to disclose that
Hikari Tsushin's marketing efforts were aggressive and improper and temporarily overstated
customer figures in exchange for vastly increased cancellation figures in later periods.
(d) The statements describing "Hikari Tsushin's Direct-Marketing
Activities" on pages 45-46 of the Prospectus, including the statement that "The number of Hikari
Tsushin salespersons dedicated to selling and marketing our Hitmail and related services has
increased rapidly, from only 105 at January 31, 1999 to about 1,200 in January 1999 [should
read January 2000]. We expect the number of salespersons will continue to grow ...." This
statement misleadingly suggested that the Company would experience growth at a time when
Hikari Tsushin was reducing the number of salespersons devoted to Crayfish sales.
29. Following the collapse of Crayfish's stock price, additional disclosures about the
Company and its previously undisclosed problems emerged. According to a November 6, 2000
article in The Nikkei Weekly, at a November 1, 2000 press conference, defendant Matsushima
"indicated that Hikari Tsushin's marketing methods had been too forceful and had caused
distrust among Crayfish customers." Also on November 1, 2000, Crayfish announced that it had
severed its relationship with Hikari Tsushin.
30. On November 21, 2000, Crayfish announced that certain directors and corporate
auditors had "retired" from the Company.
31. Thereafter, according to an April 5, 2001 press release issued by Crayfish, the
Company's corporate auditors expressed to Crayfish's board of directors that the board should
relieve Isao Matushima of certain representative authority at the Company because the auditors
11
were of the opinion that Crayfish did not properly use the proceeds of its Offering. When the
board of directors rejected this proposal, the Company's corporate auditors resigned.
The Road Show And Post-IPO Reports
32. At or about the same time as the Offering, the defendants herein went on a "Road
Show" in which they actively promoted the Company as an investment. During this Road Show,
the defendants met with members of the investment community to describe the nature of the
Company's business, its past financial results and its anticipated future results. The Road Show
included presentations by the defendants and question and answer sessions. Included among the
projected future results were a variety of earnings estimates, including estimates that the
Company would earn certain specific amounts per share in fiscal 2000. During these
presentations, which became part of the Offering process, defendants also spoke in highly
positive terms about the Company's near-term and long-term prospects.
33. Shortly after the Road Show, the Underwriter Defendants issued "booster shot"
reports (i.e., well-timed and favorable analyst reports from an underwriter in the Offering) about
Crayfish which again spoke in highly positive terms about the Company and which shared
additional estimates and financial projections.
34. In negligent disregard of the truth concerning Crayfish's profitability, business
success , expected substantial profitability and market leadership, defendants made or
participated in the making of materially false and/or misleading statements to the investing
public as particularized above. These representations were materially false and/or misleading
when made for the reasons set forth above and in that they failed to disclose the following
material , adverse facts about Crayfish' s revenues, earnings, business , financial condition and
prospects , which facts were negligently disregarded by defendants, including that the Company
12
was confronting a significant hardship relating to its partnerships and contractual relations with
Hikari Tsushin and thus that the Company would not be as profitable, and would not experience
the revenue growth that defendants previously represented.
35. The subsequent disclosures relating to Hikari Tsushin revealed matters relating to
Crayfish's financial condition and prospects which by their nature were ongoing and material.
These problems were operative throughout the relevant time period and contradicted and
discredited defendants' false statements of optimism and outlook to the investing public. As a
result of the factors described herein, the price of Crayfish's shares has steadily and sharply
declined from the Offering price of $24.50 per share to below $6.00 per share in four short
months, reflecting a more than 70% decline in the market price of the Company's stock.
COUNT I
[Against All Defendants For Violations
Of Section 11 Of The Securities Act]
36. Plaintiffs repeat and reallege each and every allegation contained above.
37. This Count is brought by plaintiffs pursuant to Section 11 of the Securities Act,
15 U.S.C. § 77k, on behalf of the Class, against all defendants and does not sound in fraud.
38. The Registration Statement for the Offering was inaccurate and misleading,
contained untrue statements of material facts, omitted to state other facts necessary to make the
statements made not misleading, and concealed and failed adequately to disclose material facts
as described above.
39. The Company is the registrant for the Offering. The Underwriter Defendants
were the lead underwriters of the Crayfish shares sold in the Offering as defined in Section
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11(a)(5) of the Securities Act. The defendants named herein were responsible for the contents
and dissemination of the Registration Statement and the Prospectus.
40. As issuer of the shares, Crayfish is strictly liable to plaintiffs and the other
members of the Class for the misstatements and omissions. The Underwriter Defendants are
also strictly liable for their sale of Crayfish shares pursuant to the Offering.
41. As underwriters of the Offering, each of the Underwriter Defendants owed to the
purchasers of the shares of Crayfish, including plaintiffs and the other members of the Class, the
duty to make a reasonable and diligent investigation of the statements contained in the
Prospectus at the time it became effective, to ensure that said statements were true and that there
was no omission to state a material fact required to be stated in order to make the statements
contained therein not misleading. The Underwriter Defendants knew, or in the exercise of
reasonable care, should have known of the material misstatements and omissions contained in
the Prospectus as set forth herein. As such, the Underwriter Defendants are liable to plaintiffs
and the other members of the Class.
42. None of the defendants named herein made a reasonable investigation or
possessed reasonable grounds for the belief that the statements contained in the Registration
Statement and the Prospectus were true and without omissions of any material facts and were not
misleading.
43. Defendants issued, caused to be issued and participated in the issuance of
materially false and misleading written statements to the investing public which were contained
in the Prospectus, which misrepresented or failed to disclose, inter alia, the adverse facts set
forth above. By reason of the conduct herein alleged, each defendant violated, and/or controlled
a person who violated, Section 11 of the Securities Act.
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44. Plaintiffs acquired Crayfish shares issued pursuant to the Registration Statement
and Prospectus.
45. Plaintiffs and the other members of the Class have sustained damages. The value
of Crayfish shares has declined substantially subsequent to, and due to, defendants ' violations.
46. At the times they purchased Crayfish shares, plaintiffs and the other members of
the Class were without knowledge of the facts concerning the wrongful conduct alleged herein
and could not have reasonably discovered those facts prior to the Offering. Less than one year
has elapsed from the time that plaintiffs discovered or reasonably could have discovered the
facts upon which this Complaint is based to the time that plaintiffs filed this Complaint. Less
than three years have elapsed from the time that the securities upon which this Count is brought
were bona fide offered to the public to the time plaintiffs filed this Action.
COUNT II
[Against The Underwriter Defendants For Violations Of
Section 12(a)(2) Of The Securities Act]
47. Plaintiffs repeat and reallege each and every allegation contained above.
48. This Count is brought by plaintiffs pursuant to Section 12(a)(2) of the Securities
Act on behalf of all purchasers of Crayfish shares in connection with, and traceable to, the
Offering and does not sound in fraud.
49. Defendants were sellers, offerors, and/or solicitors of sales of the shares offered
pursuant to the March 6, 2000 Prospectus.
50. The Prospectus contained untrue statements of material facts, omitted to state
other facts necessary to make the statements made not misleading, and concealed and failed to
disclose other material facts. Defendants' actions of solicitation included participating in the
preparation of the false and misleading Prospectus.
15
51. The defendants owed to the purchasers of Crayfish shares, including plaintiffs and
the other members of the Class of purchasers of Crayfish shares, the duty to make a reasonable
and diligent investigation of the statements contained in the Offering materials, including the
Prospectus contained therein, to insure that such statements were true and that there was no
omission to state a material fact required to be stated in order to make the statements contained
therein not misleading. Defendants knew of, or in the exercise of reasonable care should have
known of, the misstatements and omissions contained in the Offering materials as set forth
above.
52. Plaintiffs and the other members of the Class purchased or otherwise acquired
Crayfish shares pursuant to, and traceable to, the defective Prospectus. Plaintiffs and the other
members of the Class did not know of, or in the exercise of reasonable diligence could not have
known of, the untruths and omissions contained in the Prospectus.
53. Plaintiffs, individually and representatively, hereby offers to tender to defendants
those securities which plaintiffs and the other members of the Class continue to own, on behalf
of all members of the Class who continue to own such securities, in return for the consideration
paid for those securities together with interest thereon.
54. By reason of the conduct alleged herein, defendants violated, and/or controlled a
person who violated, § 12(a)(2) of the Securities Act. Accordingly, plaintiffs and the other
members of the Class who hold Crayfish shares purchased in the Offering have the right to
rescind and recover the consideration paid for their Crayfish shares and, hereby elect to rescind
and tender their Crayfish shares to the defendants sued herein. Plaintiffs and the other members
of the Class who have sold their Crayfish shares are entitled to rescissory damages.
16
55. Less than one year has elapsed from the time that the securities upon which this
Count is brought were sold to the public to the time of the filing of this action.
COUNT III
[Against Isao Mastushima and Hikari Tsushin ForViolations of Section 15 of the Securities Act]
56. Plaintiffs repeat and reallege each and every allegation contained above.
57. This Count is brought by plaintiffs pursuant to Section 15 of the Securities Act
against the Isao Matsushima and Hikari Tsushin and does not sound in fraud.
58. Each of the defendants named in this Count was a control person of Crayfish by
virtue of their positions as directors and/or senior officers, and controlling shareholdings of
Crayfish. The Defendants also served on and or controlled Crayfish's Board of Directors.
Finally, the Defendants each had a series of direct and/or indirect business and/or personal
relationships with other directors and/or major shareholders of Crayfish.
59. Each of the Defendants was a culpable participant in the violations of Sections 11
and 12(a)(2) of the Securities Act alleged in Counts I and II above, based on their having signed
the Registration Statement and having otherwise participated in the process which allowed the
Offering to be successfully completed.
60. As a result of the foregoing, plaintiffs and the other members of the Class
suffered damages.
PRA YER FOR RELIEF
WHEREFORE, plaintiffs, on behalf of themselves and the other members of the Class,
pray for judgment as follows:
A. Declaring this action to be properly maintained as a plaintiff class action
pursuant to Rule 23 of the Federal Rules of Civil Procedure;
17
B. Awarding plaintiffs and the other members of the Class damages together
with interest thereon;
C. Awarding plaintiffs and the other members of the Class rescission on
Count II to the extent they still hold Crayfish shares, or if sold, awarding rescissory damages in
accordance with Section 12(a)(2) of the Securities Act;
D. Awarding plaintiffs and the other members of the Class their costs and
expenses of this litigation, including reasonable attorneys' fees, accountants' fees and experts'
fees and other costs and disbursements; and
E. Awarding plaintiffs and the other members of the Class such other and
further relief as may be just and proper under the circumstances.
18
JURY TRIAL DEMANDED
Plaintiffs demand a trial by jury.
Dated: July 19, 2002 SHALOV STONE & BONNER LLP
By:. ^A-)4ST^-"
Ralph M. Stone (RS-4488)
485 Seventh Avenue, Suite 1000New York, New York 10018(212) 239-4340Fax (212) 239-4310
MILBERG WEISS BERSHAD HYNES & LERACH LLP
By: /zA(^
Sanford P . Dumain (SD-8712)
One Penn Plaza , 49" FloorNew York, New York 10119(212) 594-5300Fax (212) 868-1229
Co-Lead Counselfor Plaintiffs
Ofcounsel:
Ira M. Press
Kirby Mclnerny & Squire LLP830 Third AvenueNew York, New York 10022
Andrew M. Schatz
Schatz & Nobel, P.C.
330 Main Street
Hartford , Connecticut 06106
19
Robert I. HardwoodWechsler Harwood Halebian & Feffer, LLP488 Madison AvenueNew York, New York 1022
Fred T. Isquith
Wolf Haldenstein Adler Freeman & Herz LLP
270 Madison Ave.
New York, New York 10016
Jules BrodyStull, Stull & Brody
6 East 4511' Street
New York, New York 10017
Joseph H. Weiss
Weiss & Yourman
551 Fifth Ave., Suite 1600New York, New York 10176
Brian P. MurrayRabin & Peckel, LLP
275 Madison Avenue
New York, New York 10016
Stanley M. GrossmannPomerantz , Haudek, Block, Grossman & Gross, LLP100 Park Avenue, 261 FloorNew York, New York 10017
Jeffrey S. Abraham
One Penn Plaza
New York, New York 10119
Leo Desmond
2161 Palm Beach Lakes Blvd.West Palm Beach, Florida 33409
Charles J. Piven
401 East Pratt Street, Suite 2525
Baltimore , Maryland 21202
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CERTIFICATE OF SERVICE
This is to certify that true and correct copies of the foregoing Consolidated Class Action Complaint was served by
Hand Delivery on the following counsel of record on this 19`h day of July 2002:
Arthur M. Handler, Esq.Handler & Goodman LLP805 Third Avenue, 8" FloorNew York, New York 10022
Attorneysfor defendant Crayfish Co.
Kenneth M. Kramer, Esq.Shearman & Sterling599 Lexington AvenueNew York, New York 10022
Attorneysfor defendants Morgan Stanley Dean Witter,Nomura Securities International, Inc., andMerrill Lynch
Cyrus Benson III, Esq.White & Case LLP1155 Avenue of the AmericasNew York, New York 10036
Attorneysfor defendant Hikari Tsushin, Inc.
Jonathan Rosenberg, Esq.William J. Sushon, Esq.O'Sullivan LLP30 Rockefeller Center, 24`h FloorNew York, New York 10112
Attorneys for defendant Isao Matsushima
Ralph M. Stone (RS-4488)
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