Wednesday, March 28, 2007

IPO case could split top court

An engaged and likely divided Supreme Court heard arguments Tuesday, March 27, in a case that asks whether the securities industry can be sued for allegations of antitrust violations in creating syndicates for initial public offerings.
If the justices decide SEC oversight is not sufficient, the banks may become vulnerable to private antitrust challenges for many common practices in taking companies public.
In addition to exposing the industry syndication practices to a flood of lawsuits, applying antitrust law would increase the financial stakes for perceived wrongs as well. In antitrust cases, unlike violations of securities law, damages are tripled for plaintiffs who can prove they were illegally harmed.

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