Musicmaker.com (Nasdaq: HITS) fell 13 percent Monday, following news that a class action lawsuit had been filed on behalf of everyone who bought Musicmaker shares between July 7 and November 15, 1999. The company, which provides custom CDs and digital downloading of licensed music from the Internet, said it had not seen the complaint and was not aware of the basis for the charges.
According to the complaint, Musicmaker and controlling partners EMI and Virgin made false and misleading statements and omitted material information about the company’s operations. The suit, which also charges some company officers with breaking security laws, alleges that the misstatements drove Musicmaker shares as high as $28. Monday, the shares closed down 1 1/6 to 4.