US Judge Gives Tentative OK to $586 Mln IPO Pact

US Judge Gives Tentative OK to $586 Mln IPO Pact - 6.11.2009

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2009 News and Press Releases

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

SETTLEMENT NEWS:

US Judge Gives Tentative OK to $586 Mln IPO Pact
Martha Graybow

Reuters. June 11, 2009
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EXCERPT: A proposed $586 million settlement to end investor lawsuits over the pricing of initial public offerings during the late 1990s stock market boom has won preliminary approval from a federal judge. Judge Shira Scheindlin, in a ruling made public on Thursday, scheduled a fairness hearing on the proposed settlement for Sept. 10 in U.S. District Court in Manhattan. She must give final approval before the money can begin to be distributed to investors. The settlement would end years of litigation in more than 300 lawsuits against a group of investment banks and companies that went public at the height of the technology stock bubble. The litigation encompassed more than 300 IPOs of technology and Internet stocks marketed between 1998 and 2000. The plaintiffs alleged that IPO underwriters required investors to purchase shares often at inflated prices, and to pay the underwriters undisclosed compensation. They contend they lost billions of dollars as a result of these manipulations. The defendants include numerous investment banks, including Credit Suisse Group AG and JPMorgan Chase & Co , as well as some of the companies that were brought public. The proposed settlement amount is significantly less than what plaintiffs had originally hoped to receive. Earlier attempts to settle the case for more than $1 billion fell apart, as the case went through several appeals. Scheindlin said in her ruling that in the current economic climate, 'it is unlikely' that the defendants would be able to withstand a bigger settlement. 'It is therefore in plaintiffs' best interests to resolve these actions, and quickly,' she wrote.

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