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1b settlement ipo issuers { June 26 2003 } Original Source Link: (May no longer be active)
http://reuters.com/financeNewsArticle.jhtml?type=governmentFilingsNews&storyID=2992751http://reuters.com/financeNewsArticle.jhtml?type=governmentFilingsNews&storyID=2992751
UPDATE 2-$1 billion settlement reached with IPO issuers
Thu June 26, 2003 05:54 AM ET
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NEW YORK, June 26 (Reuters) - A proposed settlement worth at least $1 billion has been reached with the issuers of initial public offerings who were included in an investor lawsuit alleging rigged IPOs, lawyers for the plaintiffs said in a statement on Thursday.
Cases against 55 investment banks, which underwrote the initial public offerings, will continue, the lawyers said. Further details were not available, but the lawyers said a press conference would be held later Thursday morning.
The plaintiffs are led by the law firm of Milberg Weiss Bershad Hynes & Lerach LLP.
According to the statement, the proposed settlement would guarantee at least $1 billion to investors involved in the class action suit from insurers of the IPO issuers.
Disgruntled investors filed a class-action suit against 55 investment banks, including Credit Suisse First Boston CSGZn.VX and Citigroup Inc.'s C.N Salomon Smith Barney, charging there was industry-wide misconduct artificially to boost demand and inflate the price of some 309 IPOs.
Legal experts have said damages from a trial could run into billions of dollars.
Major investment banks are facing a wave of investor lawsuits in the wake of scandals on Wall Street over biased stock research and so-called IPO spinning, where banks guaranteed favoured clients stock allocations in hot IPOs during the Internet boom.
U.S. regulators in April imposed a $1.4 billion fine on ten major investment banks over tainted stock research, used to win investment banking business from company executives.
Separately, investors have launched lawsuits against investment banks seeking compensation for money they lost as the dot-com bubble burst.
Citigroup C.N and Credit Suisse First Boston CSGZn.VX , two of the banks that were part of the Wall Street settlement with the regulators, in January set aside money against potential investor litigation.
Citigroup set aside $1.3 billion for the settlement with U.S. regulators over stock research, related civil litigation and Enron-related lawsuits.
CSFB, owned by Switzerland's Credit Suisse, made a $450 million provision against private lawsuits, in addition to $150 million it had set aside to cover the Wall Street settlement with regulators. (Additional reporting by Jane Merriman in London)
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