Swiss bank faces lawsuit over initial offerings in US
Credit Suisse First Boston is reportedly among seven international banks accused of violating United States antitrust laws in their allocation of initial public stock offers.
The New York Times says a class-action lawsuit has been launched against the seven banks, accusing them of demanding inflated brokerage commissions to artificially support share prices after their IPOs.
The suit also describes “tie-in purchases” requiring investors in initial stock offerings to buy additional shares in the companies after their public launch.
It says these purchases were made at “specified escalating price levels designed to push up and inflate the price of the class security to increasingly higher levels”.
The suit was reportedly filed in Manhattan on Friday and will cover several stock offerings.
The Securities and Exchange Commission and the US attorney’s office in Manhattan are already investigating the IPO market.
The other banks named in the lawsuit are reported as Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley Dean Witter, BancBoston Robertson Stephens and Salomon Smith Barney.
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