12 firms win ruling on claims of rigged IPOs
Morgan Stanley, Credit Suisse First Boston Inc. and 10 other securities firms don’t have to face a class action filed by investors who contend the firms rigged public stock offerings in the 1990s, a federal appeals court ruled Tuesday.
The U.S. Court of Appeals in New York said a judge erred in granting class-action status to six of 310 cases arising from allegations that the market for initial public offerings was manipulated by the banks and the Internet start-ups they took public during the technology stock boom.
The ruling means investors must pursue their claims individually, making the litigation of each claim more difficult and expensive and making it harder to force the banks into a settlement.
“We are very pleased with the court’s decision,” a Morgan Stanley spokesman said.