Amazon.com is being sued by a group of shareholders who claim the company gave false information about its finances.
In a statement issued by lawyers representing the plaintiffs the suit alleges Amazon chief executive officer Mr Jeff Bezos and other executives gave "false and misleading" statements concerning the group's sales, profits and cash position.
Amazon's finances have been the subject of intense speculation on Wall Street in recent weeks with the stock plunging on rumours that the "etailer" may file for bankruptcy.
Last week the New York Society of Security Analysts' Committee for Corporate Governance sent a second letter to Mr Bezos demanding that Amazon reveal more financial information to put to rest fears over its finances.
Mr Bezos is reportedly also being investigating by the Securities and Exchange Commission for selling stock in the company after seeing a negative analyst report but before it was released publicly.
The suit alleges Mr Bezos sold those shares at "artificially inflated prices" for proceeds of more than $30 million. It also claims he misled investors over how much cash the company had.
The shareholders alleged the company failed to disclose that some of its investments in other companies were losing millions of dollars and that while much of the group's revenue was recorded as cash it was actually in the form of "highly speculative" securities.
Concerns over the group's cash position were first brought to light by Lehman Brothers analyst Mr Ravi Suria, who last warned last year that the company will run out of money in 2001.
In a more recent note Mr Suria said the company will face a "creditor squeeze" in the second half of this year due to its depleted cash reserves.
The suit was filed in US District Court for the Western District of Washington.
AFP