JPMorgan Agrees To Settle IPO 'Laddering' Suit For $425M
(what whining little babies - suing JPM - how can you stand it? they should be thankful for the lesson JPM taught them eh? you are so silly)
.
By David Enrich
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--JPMorgan Chase & Co. (JPM) has agreed in principle to pay $425 million to settle litigation accusing the bank of artificially inflating the price of stock after initial public offerings.
The case involves allegations of "laddering," a scheme in which Wall Street underwriters allocated shares in hot IPOs to institutional investors on the condition that they would keep buying shares after the stock started trading publicly. The investors also had to pay higher commissions. The practice, which took place during the dot-com boom in the late 1990s, was designed to boost the price of shares.
JPMorgan spokesman Joseph Evangelisti said the settlement will have "no adverse effect on our financial results."
The preliminary settlement pact, which is nonbinding, makes JPMorgan the first investment bank to resolve the claims, said Melvyn Weiss, a partner in law firm Milberg Weiss, which is representing plaintiffs in the suit. The settlement is subject to court approval.
Dozens of other investment banks, including some major Wall Street brokerages, have also been sued. Weiss said JPMorgan's decision to settle is a "strong indication that others will follow, but I can't guarantee it."
Early last year, Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) agreed to pay $40 million each to settle Securities and Exchange Commission allegations about laddering.
-By David Enrich, Dow Jones Newswires; 201-938-2123; david.enrich@Dowjones.com
(Jed Horowitz contributed to this article.)
(END) Dow Jones Newswires
April 20, 2006 17:14 ET (21:14 GMT)
Copyright (c) 2006 Dow Jones & Company, Inc.- - 05 14 PM EDT 04-20-06 |
