U.S. Supreme Court

Antitrust Ruling Favors Wall Street

The U.S. Supreme Court has ruled that the antitrust laws do not apply to initial public offerings, since they are extensively regulated by federal securities laws.

The 7-1 ruling was a victory for Wall Street, Associated Press reports.

The case stems from suits claiming investment banks conspired to manipulate the market for IPOs by requiring purchasers of desired stock offerings to make later purchases at even higher prices. Investors say that drove up the price of new stocks.

The court said the investment banks should be immune from antitrust liability because the Securities and Exchange regulates them and their conduct, Reuters reports.

An antitrust action raises ”a substantial risk of injury to the securities market,” Justice Stephen G. Breyer wrote for the majority. “We must interpret the securities laws as implicitly precluding the application of the antitrust laws to the conduct alleged in this case.”

The rulings was Credit Suisse Securities v. Billing, No. 05-1157 (PDF posted by SCOTUSblog).

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