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Wednesday, September 28, 2005

Appeals court revives IPO price-fixing lawsuits against investment banks
Chris Buell at 7:04 PM ET

[JURIST] Two class action lawsuits accusing major US investment banks of price-fixing practices during initial public offerings of technology stocks during the late 1990s were reinstated Wednesday by the US Second Circuit Court of Appeals [official website]. The court wrote that the plaintiffs had alleged an "epic Wall Street conspiracy" on the part of Bear Stearns, Credit Suisse First Boston, Lehman Brothers, Morgan Stanley, Merrill Lynch and other banks to drive up prices of technology stocks from their issue prices and that a district judge had erred in dismissing the case on the basis of conflicts between antitrust and securities laws. The plaintiffs have also alleged that the banks used "tie-ins" to unload less valuable stocks by requiring investors to purchase them to have a shot at stocks in the highest demand. Judge William H. Pauley originally dismissed the class actions [JURIST report] in November 2003. AP has more.






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