Vonage Slapped With Class Action Suit After IPO Tanks

By Marius Meland (June 5, 2006, 12:00 AM EDT) -- Just one week after its initial public offering, Internet phone company Vonage Holdings Corp. has been hit with a class action suit alleging the company made false and misleading statements in an effort to entice potential investors into purchasing shares of the company's stock.

The suit, filed in the U.S. District Court for the District of New Jersey, alleges that the company "violated the federal securities laws by publishing a materially false and misleading joint Registration Statement and Proxy-Prospectus."

Vonage went public on May 24, in what quickly became one of the least successful IPOs of the past two years....

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