Supremes Side With Banks in Antitrust Action

Credit Suisse, Goldman won't face class action suit over late-'90s IPOs
By J. Kelman,  Newser User
Posted Jun 18, 2007 2:40 PM CDT
Supremes Side With Banks in Antitrust Action
US Supreme Court   ((c) kjetil_r)

(Newser) – The Supreme Court has broadened the shield protecting companies from antitrust lawsuits, ruling in a 7-1 decision this morning that investors cannot sue 16 banks they accuse of rigging Internet-boom-era IPOs. The majority said the SEC had adequately regulated banks' actions and that opening them up to this type of action would pose a "substantial risk of injury" to US capital markets.

The court dismissed suits demanding billions of dollars from Goldman Sachs, Credit Suisse, and 14 other banks, ruling that securities laws, not antitrust laws, should regulate their actions. Investors had accused banks of "laddering"—artificially upping post-IPO prices by forcing clients to buy stock—in several high-profile IPOs, including eBay's and Amazon.com's. (Read more US Supreme Court stories.)

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