eToys Accuses Goldman of Mispricing Its IPO

eToys, the Internet toy seller that went bankrupt early last year, claims it got low-balled on its IPO by Goldman Sachs (GS Quote) and is suing the bank over the money it left on the table.

eToys, now called EBCI Inc., said it incurred "hundreds of millions of dollars in damages and eventually had to declare bankruptcy as a result of Goldman Sachs' illegal conduct in underpricing the IPO and in receiving kickbacks." It's alleging breach of fiduciary duty, among other things.

On Goldman Sachs' recommendation, the IPO was priced at $20 a share, which eToys said was substantially lower than market conditions warranted given the high demand for its shares. ...