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Technology Stocks : Discuss Year 2000 Issues

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To: Puna who wrote (6064)	6/20/1999 7:28:00 PM
From: C.K. Houston	Read Replies (1) of 9818

OFF TOPIC - But, I found this very interesting: June 16 — The early-summer slide in Internet stocks highlights an important question: Exactly how did these stocks get so overvalued in the first place? One disturbing answer: apparent price-manipulation by underwriters at the time the companies went public. AN MSNBC.COM INVESTIGATION into the matter reveals that, in many cases, underwriters of Internet IPOs appear to have engaged in a widely practiced marketing scheme known as a “tie-in.” Its explicit purpose: to push up the after-market price of IPO shares ... The entire tie-in practice is, in fact, illegal. “Securities law can be very complex,” says Martin H. Kaplan, a securities lawyer with the New York firm of Gusrac, Kaplan and Bruno. “But this type situation is very simple and clear-cut. Any undisclosed tie-in that requires the aftermarket purchase of securities in order to obtain a pre-market allocation of stock in an IPO is per-se fraud and illegal. It violates the Sec. 17 fraud provisions of the Securities & Exchange Act of 1933, and Sec. 10 of the 1934 Act.” ... msnbc.com Cheryl

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