Feeds

Supremes back Wall Street on dot com era ladder deals

Take it to the SEC

Secure remote control for conventional and virtual desktops

Disappointed US investors cannot use anti-trust laws to sue banks they accuse of fixing the price of initial public offerings (IPO) of some 900 companies in the late 1990s.

The Supreme Court voted seven to one that such allegations should be ruled on by the Securities and Exchange Commission (SEC).

The suit alleged that big banks worked with brokers to fix the price of IPOs to the detriment of the US public. They also used "laddering" - favoured clients who got first choice of newly issued shares also had to buy shares as the price rose. This helped produce the big price jumps seen in the early trading of newly listed public companies in the late 1990s. It became common practice for the banks to ensure share offerings were effectively underwritten in this way.

The case also alleged banks paid unusually high commissions for these services. Finally, the banks were accused of "tying" - linking purchases of popular stocks with those of much less popular shares.

But the Supremes ruled on Monday that the SEC is the correct body to deal with such complaints.

Justice Stephen Breyer said such cases brought: "A substantial risk of injury to the securities markets."

Breyer said the SEC is likely to do a better job. The decision said: "A fine, complex, detailed line separates activity that the SEC permits or encourages from activity that it forbids. And the SEC has the expertise to distinguish what is forbidden from what is allowed."

It does not mean the issue is over - the SEC is still investigating several IPOs and could still rule in the investors' favour. But a victory under anti-trust legislation would have brought bigger fines and settlements for investors.

The whole decision is available as a 30 page pdf here. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
I'll be back (and forward): Hollywood's time travel tribulations
Quick, call the Time Cops to sort out this paradox!
Musicians sue UK.gov over 'zero pay' copyright fix
Everyone else in Europe compensates us - why can't you?
Megaupload overlord Kim Dotcom: The US HAS RADICALISED ME!
Now my lawyers have bailed 'cos I'm 'OFFICIALLY' BROKE
MI6 oversight report on Lee Rigby murder: US web giants offer 'safe haven for TERRORISM'
PM urged to 'prioritise issue' after Facebook hindsight find
BT said to have pulled patent-infringing boxes from DSL network
Take your license demand and stick it in your ASSIA
Right to be forgotten should apply to Google.com too: EU
And hey - no need to tell the website you've de-listed. That'll make it easier ...
prev story

Whitepapers

Driving business with continuous operational intelligence
Introducing an innovative approach offered by ExtraHop for producing continuous operational intelligence.
Why CIOs should rethink endpoint data protection in the age of mobility
Assessing trends in data protection, specifically with respect to mobile devices, BYOD, and remote employees.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Mitigating web security risk with SSL certificates
Web-based systems are essential tools for running business processes and delivering services to customers.