"OT" kinda, Stan ;0( Merrill Made IPO Clients Buy Thousands More Shares, Suit Says
By David Glovin
quote.bloomberg.com
New York, April 25 (Bloomberg) -- Merrill Lynch & Co., Goldman Sachs Group Inc., and other investment banks required customers seeking shares in initial public offerings to buy up to four times more stock in the companies after trading began, new court papers claim.
Investors suing Merrill, Goldman, and 41 other banks, including Morgan Stanley Dean Witter & Co. and Credit Suisse First Boston Inc., allege they rigged IPOs in 310 Internet and software start-ups, from 1998 to 2000. The companies are also being sued.
A central claim of the suits is that investors seeking IPO shares had to buy more stock, at a higher price, in the aftermarket, which artificially inflated share price. Investors' lawyers this week filed a new complaint, made public today, that offered their most specific allegations to date of wrongdoing by top investment banks.
``One customer, in order to obtain shares of the Agilent Technologies IPO from Merrill Lynch, was required'' to buy in the aftermarket ``more than four times the number of Agilent Technologies shares allocated to that customer in the IPO,'' the complaint says.
Plaintiffs' lawyers say damages could top $1 billion. The banks and the start-ups deny the allegations. Joseph Cohen, a Merrill Lynch spokesman, and Victoria Harmon, a CSFB spokeswoman, declined to comment. |
