On February 28, 2002, an order was entered to consolidate the IPO cases into one with the case number 01-CV-8401. In addition, an omnibus order was entered on June 04, 2002 to approve the appointment of a certain individual as lead plaintiff and the selection of lead counsel. At the same time, an amended complaint was also filed. An order substituting Cadwalader, Wickersham & Taft in place of Brobeck, Phleger & Harrison LLP as attorneys for the defendant Banc of America Securities LLC was entered on March 31, 2003. On April 24, 2007, a motion to remove Milberg Weiss and Bershad was filed. There is no order of final judgment and the case is still open.
According to a Press Release dated September 10, 2001, the complaint alleges that defendants violated the federal securities laws by issuing and selling PSi Technologies common stock pursuant to the March 16, 2000 IPO without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors. Specifically, the complaint alleges that in exchange for the excessive commissions, defendants allocated PSi Technologies shares to customers at the IPO price. To receive the allocations (i.e., the ability to purchase shares) at the IPO price, the underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of PSi Technologies stock rocketed upward (a practice known on Wall Street as ``laddering'') was intended to (and did) drive PSi Technologies' share price up to artificially high levels. This artificial price inflation enabled both the underwriters and their customers to reap enormous profits by buying stock at the IPO price and then selling it later for a profit at inflated aftermarket prices.