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Vonage Holdings, the pioneering internet phone company company whose shares have fallen 30 per cent since their market debut 10 days ago, has been accused in a class-action lawsuit of violating US securities laws.

The suit, filed on behalf of shareholders by Motley Rice, a South Carolina-based law firm, accuses the loss-making voice over internet protocol company of ?publishing a materially false and misleading? information when it pre-sold 13.5 per cent $531m of its initial public offering to customers.

Vonage has yet to comment on the law suit, which was filed on Friday, but securities law experts suggest that it raises a number of significant issues, including whether this type of IPO is suitable for private investors.

The complaint, posted on the law firm?s web site, claims that Vonage?s investors were motivated to push for an IPO because the company had been losing money and the investors were desperate for an exit strategy.

The complaint alleges that Vonage?s officers decided to offer shares to customers because they knew institutional investors, who normally buy IPOs, would be reluctant to buy Vonage stock. The company had spent heavily on marketing and had never been profitable.

Vonage?s stock dropped sharply on its first day of trading and has continued to fall amid suggestions that many of the estimated 10,000 Vonage customers who participated in the pre-sale are now refusing to pay for their shares. Vonage has about 1.6m total customers.

Despite the precipitous share price decline some analysts including Albert Lin of American Technology Research, continue to recommend the stock.

?We see this as an interesting side show and a PR fiasco for Vonage,?? said Mr Lin, in a note to clients on Monday, ?but do not see how the whole Direct Sale Placement will impact Vonage?s share value over time.?

?We still see Vonage as being a company where beauty is in the eye of the beholder, and as long as the customer base grows, many competitors will find that base very interesting. With a very profitable customer valuation at rates lower than most competitor?s, we still find this to be a widely hated stock with the potential to surprise.?

He added, ?The lawsuit seems to go too far in that it throws in the idea that Vonage only created a sale to customers because there was no institutional interest.?

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