High Court Frees Wall Street From Threat Of Antitrust IPO Suits

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The Supreme Court delivered good news to Wall Street’s investment banks today. The high court ruled that the banks are immune from antitrust lawsuits that alleged they had conspired to rig prices of initial public offerings during the tech boom of the late 1990s.
The 7-1 ruling was not unexpected but the stakes were high. Antitrust suits permit plaintiffs to claim treble damages, creating the possibility for gigantic fines. What’s more, the suit threatened to add another layer of potential legal liability and regulatory supervision to the IPO process, and to overturn many of Wall Street’s standard practices.
The list of defendants in the case reads like a who’s who of Wall Street investment banks. It includes Credit Suisse, Bear, Stearns, Citigroup, Comerica, Deutsche Bank, Fidelity, Goldman Sachs, Janus Capital, Lehman Brothers, Merrill Lynch and Morgan Stanley. The plaintiffs had alleged the banks had conspired to rig the IPOs of some 900 companies.
The decision was hardly a surprise. During oral arguments, court watchers got the impression that the judges were united against the plaintiff's case. Only Clarence Thomas voted against the majority opinion. (Anthony Kennedy’s son works at Credit Suisse, so he recused himself.)
Investment Banks Shielded From Suit by Top U.S. Court [Bloomberg]
Credit Suisse First Boston, LLC et al v. Billing et al [Supreme Court: pdf]

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