The nineties may have finally ended yesterday, when a panel of federal appeals courts judges shut down what some Wall Street lawyers were calling "the one case to kill them all"--the consolidated class action claiming virtually every major investment bank had rigged the tech IPOs of the late nineties. The potential liability was gigantic. And now the case will most likely just go away.
From the New York Times:
Wall Street banks, accused of manipulating the prices of initial public offerings of technology companies during the market boom of the late 1990s and cheating small investors out of hundreds of millions of dollars, will not have to face a huge securities class-action lawsuit, a federal appeals court ruled yesterday.
The decision was seen on Wall Street as a huge victory. The investment banks faced making payments of billions of dollars to settle the accusations — if they chose not to risk a trial — involving potentially millions of investors, lawyers involved in the case said.
The ruling also raises the prospects that earlier settlements in the case, in particular a $425 million agreement with J. P. Morgan Chase and a $1 billion guaranteed proposed deal with the issuers of the new shares that was still pending approval by the judge in the case, could be nullified.
Court Rejects Class Action Against Banks [New York Times]