2TheMart Launches Online Auction Site 5 Months Late

Irvine-based 2TheMart.com Inc., an online auction company that has seen its stock fluctuate wildly over the last year, finally launched its Web site Monday, five months later than expected.

The company, plagued by three shareholder lawsuits and led by two men with controversial backgrounds, launched its auction site with a limited selection of products.

In its first day, bidding activity on the site appeared to be minimal. The site was riddled with dead-end links and notices of features “coming soon.”

Company officials did not return calls.

The company’s stock closed at $9.75, down 75 cents a share. Last week, the shares traded at $16.50. Seven weeks earlier, the stock was at $2.38.

The company first drew attention in January when its stock rocketed from $2 to $50 as 2TheMart promised to launch a site to rival EBay Inc.

But the company twice missed its target launch dates. Later, it was revealed that the company’s founders, Chairman and Chief Executive Steven Rebeil and President Dominic J. Magliarditi, had been denied licenses to run a casino two years ago by the Nevada Gaming Commission.

Commissioners found the men were “not of good character, honesty and integrity” and should not run a public company.

The commission found that both had lied to investigators of Nevada’s Gaming Control Board.

Rebeil and Magliarditi each own about a third of 2TheMart.

In September, three separate shareholder lawsuits contend the company made misleading statements about the readiness of its online auction.

On at least four occasions from January to March, the company issued news releases stating that its Web site was “currently in its final development,” even though it wasn’t until late May that the company signed a contract with IBM Corp. to begin developing the site, the lawsuits said.

In July, the accounting firm Deloitte & Touche, without explanation, severed its ties with the company.