In Re 2TheMart. Com, Inc. Securities Litigation

ORDER DENYING DEFENDANTS’ MOTION TO DISMISS AND MOTION TO STRIKE

I. Introduction

This matter comes before the Court on Defendants’ motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) and motion to strike pursuant to Federal Rule of Civil Procedure 12(f). Based on the materials and oral argument submitted by the parties, it appears that Plaintiffs’ Consolidated Amended Complaint (hereinafter, “complaint”) adequately states a claim for securities fraud upon which relief may be granted, and that the subject matter at issue in the motion to strike may be at issue in the case. Therefore, the Court denies both motions.

II. Factual Background

Defendant, 2TheMart.com, Inc. (hereinafter, “2TheMart”), was conceived in January 1999 by Defendants Magliarditi and Rebeil as a company that was to launch an e-commerce auction web site in direct competition to other auction web sites such as eBay.com. (Compl. at ¶ 2.) The web site was intended to be the core money-making strategy of the company. On January 19, 1999, the defendants announced the acquisition of CD Rom Yearbook, Inc., a publicly traded entity. As a result, 2TheMart acquired CD Rom Yearbook, Inc. as a shell…