Investment Banks Win Major Antitrust Victory

The Supreme Court ruled in favor of 17 major investment banks today in an antitrust lawsuit filed by investors who claimed the banks manipulated the IPO market in the dot-com boom years between 1997 and 2000. According to Securities news law blog, SECLaw.com, in a seven to one vote, the court gave the banks “broad implied immunity from antitrust lawsuits, ruling that antitrust laws do not apply to the syndication and marketing techniques used in IPOs.”

The Supreme Court ruled in favor of 17 major investment banks today in an antitrust lawsuit filed by investors who claimed the banks manipulated the IPO market in the dot-com boom years between 1997 and 2000. According to Securities news law blog, SECLaw.com, in a seven to one vote, the court gave the banks “broad implied immunity from antitrust lawsuits, ruling that antitrust laws do not apply to the syndication and marketing techniques used in IPOs.”

The lawsuit claimed that banks and underwriters tied less desirable initial public offerings (IPOs) to popular ones in order to inflate after-market prices of the stocks.

The blog says the court “justified” its ruling saying that in antitrust cases the SEC does a better job than courts and judges at de termining “the legality of conduct in the complex field of initial offerings.” And so, the Supreme Court passes the baton to the SEC.

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