Vonage always seems to be in turbulent waters since its inception. There seems to be a speculation that Vonage violated US Securities and Exchange Commission rules while trying to reward its customers with a preferred share program. This could mean Vonage would be forced to buy back preferential shares at $17 each whereas earlier it had been forcing its unwilling customers to pay for those shares. I had mentioned about this in one of my earlier posts. In case Vonage has to pay back, its resources would be taken back by $78m.
This is being speculated on the basis of SEC filing by Vonage before its IPO in which the company admitted to errors that violate SEC rules. Remember!! Vonage had send an invitation through e-mail to the customers asking them to be part of the share program but did not include working hyperlink to the prospectus and even it was missing from the web page for the prospective buyers.
Earlier in 2004, Google had violated SEC laws with a preferred share program for employees and it had offered to buy back shares worth $3.1 bn because of its failure to register them. Let's see what happens with Vonage.
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