Will the IPO allocation cases be granted class certification? It seems likely, but the S.D.N.Y. has asked the plaintiffs to provide the court with more information before it will let them proceed against the 55 investment banks named in the suits.
According to a Reuters report, Judge Scheindlin issued an order on Monday giving the plaintiffs two weeks to "redefine the class and convince the court that the definition is adequate." Moreover, one of the plaintiffs' primary claims is that the investment banks engaged in "laddering," a practice in which the banks allegedly handed out IPO shares to buyers who promised to buy more shares at higher prices once the stocks began trading publicly. The alleged goal was to put additional upward pressure on the stock prices. As to these claims, the court stated that the plaintiffs "should report within three weeks on how an expert would measure what effect, if any, was exerted on stock prices" by the alleged laddering.
Quote of note: "In her order, Judge Scheindlin said the court record on whether to grant class status is insufficient in two ways and set tight deadlines for plaintiffs to fill in the gaps. 'Plaintiffs' failure to adequately respond to either aspect of this order may result in denial of the pending motions' seeking class certification, the order said."Posted by Lyle Roberts at June 22, 2004 11:50 PM | TrackBack