Court Rejects Class Action Against Banks: Wall Street banks, accused of manipulating the prices of initial public offerings of technology companies during the market boom of the late 1990s and cheating small investors out of hundreds of millions of dollars, will not have to face a huge securities class-action lawsuit, a federal appeals court ruled yesterday. [...]
The lawsuit accused the Wall Street banks of netting huge profits during the technology boom of the late 1990s by artificially inflating the share prices through various means of newly public companies after they went public.
The suit contended that the banks had awarded shares of hot initial offerings to favored clients in return for lucrative investment banking business. It also contended that the banks had made deals with investors so that they would buy shares in the aftermarket to drive up prices artificially and created misleading research to lure investors into buying.
