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Investment Banks Win Delay in IPO Case

Markets

May 21, 2002|Bloomberg News

Goldman Sachs Group Inc., Credit Suisse First Boston Inc. and about 40 other investment banks won a bid Monday to delay the surrender of documents to investors suing over stock offerings of Internet and software start-ups the banks took public in the late 1990s. Investors had asked the judge presiding over a barrage of initial-public-offering lawsuits to order the defendants to turn over internal documents. But U.S. District Judge Shira Scheindlin in New York denied the request. She said federal securities law requires halting pre-trial discovery until after a judge rules on a request to dismiss a suit.

The investment banks are expected to make a request for blanket dismissal soon.

The judge said the investment banks will be allowed first "to test" whether investors have a viable claim before incurring "the burden and expense" of discovery.

Investors claim the banks rigged IPOs of 310 companies from 1998 to 2000 to benefit themselves and key clients.

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