The lawsuit, filed Tuesday in U.S. District Court in Washington, alleges that Amazon executives gave misleading statements that "inflated" the company's stock price. Attorneys from the law offices of Weiss & Yourman and Keller Rohrback said the lawsuit covers shareholders who obtained Amazon stock between Feb. 2, 2000, and March 9, 2001.
On March 9, lawyers from New York-based Wechsler Harwood Halebian & Feffer filed a similar lawsuit in U.S. District Court in Washington alleging that Amazon had overstated assets, revenue, income and earnings per share.
"Based on the allegations we have reviewed so far, it is clear that these lawsuits are without merit," Amazon said in a statement Wednesday. "We expect that they will be dismissed by the court."
Amazon's accounting practices have been investigated before, but the company has come under increasing scrutiny in recent months.
David Becker, an attorney for the Securities and Exchange Commission, told The Washington Post last month that the agency was "extremely concerned" by Amazon's practice of reporting pro forma results, which he said could mislead investors.
Earlier this month, The New York Times published a report saying that the SEC was investigating a stock sale by Amazon Chief Executive Jeff Bezos. According to the Times' report, Bezos sold shares worth $11.7 million allegedly after learning that a Wall Street firm was preparing to release a negative research report on Amazon.
Days later, The Wall Street Journal reported that because Amazon's stock price rose after the negative report was released, it was highly unlikely that anything would come of the investigation.
In addition, Amazon is under public pressure from a group sponsored by the New York Society of Security Analysts to provide more details about its financial situation. The group has held a series of public forums on the reports Amazon presents to investors and analysts.
The requests came after reports by Ravi Suria of Lehman Brothers and Henry Blodget of Merrill Lynch that reached different conclusions about the company's prospects. The NYSSA group held a forum in February to discuss the conflicting reports and sent two letters to Amazon requesting more information. Although Amazon representatives had taken part in previous forums sponsored by the group, they declined to participate in the February forum and have so far declined to respond to the written requests.
The crux of the shareholder lawsuit filed Wednesday deals with the way Amazon reported how it received payment from e-commerce companies it invested in. Through its Amazon Commerce Network, the giant e-tailer cut deals under which it agreed to invest in companies such as Drugstore.com, Living.com and Pets.com if they in turn paid Amazon "advertising and marketing fees."
What Amazon failed to disclose, according to the shareholders, is that the Net's largest online store had allowed the companies it invested in to pay in stock and equity instead of cash, the shareholders claim.
Amazon predicted last February that the deals would produce $500 million in cash, but the shareholders allege that the investments actually lost "no less than $266 million."
The lawsuit also notes that between February and October of last year, when the stock dropped 62 percent from $85 to $32, Amazon executives and insiders, including Bezos, registered to sell 6 million shares of Amazon stock, worth about $300 million.