CSFB to Face Lawsuit Over Pricing of IPOs

Credit Suisse First Boston Inc. must defend itself against a lawsuit accusing the bank of underpricing the initial public offerings of companies that went public in the Internet boom of the late 1990s.

U.S. District Judge Shira Scheindlin refused Wednesday to dismiss most of the claims in a suit against Donaldson, Lufkin & Jenrette Securities Corp., which merged with CSFB in 2000.

Xpedior Inc., a website developer, raised $173.4 million in its December 1999 IPO and filed for bankruptcy protection 2 1/2 years later. Its assets were transferred to Xpedior Creditor Trust, which represents the company’s creditors. Xpedior claimed in its suit that DLJ underpriced its stock to sell shares to favored clients. CSFB spokesman Victoria Harmon declined to comment.

From Bloomberg News