High court rules against dot-com investors

Group of investors had accused ten leading investment banks of misconduct for their role in initial public stock offerings of several hundred high-tech companies during the late 1990s.

Ten leading investment banks that helped several hundred technology companies make initial public offerings during the dot-com bubble of the late 1990s can't be sued for antitrust violations, the U.S. Supreme Court ruled Monday.

In a 7-1 decision (PDF) authored by Justice Stephen Breyer, the majority dismissed arguments made by 60 investors who filed a pair of class-action antitrust suits against the banks in January 2002.

The investors had claimed that the banks had behaved anticompetitively by imposing special conditions on top of the agreed-upon IPO share prices and commission. According to the high court opinion, those conditions included forcing the investors to agree to purchase additional shares later at higher prices, to pay "unusually high" commissions, or to buy "less-desirable" securities as well.

A federal district court initially dismissed the allegations against the banks, but the Second Circuit Court of Appeals disagreed. The Supreme Court, for its part, reversed the appeals court finding.

Breyer wrote that the Securities and Exchange Commission already actively enforces forbidden conduct and that "to allow an antitrust lawsuit would threaten serious harm to the efficient functioning of the securities markets."

What does all of this mean for Wall Street? Read the full story on CNET News.com.

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Tech Culture
About the author

    Anne Broache
    covers Capitol Hill goings-on and technology policy from Washington, D.C.
     

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