Some 300 companies that issued initial public stock offerings during the Internet bubble agreed to pay $1 billion to settle a class-action lawsuit brought by thousands of investors who say they were victims of fraud. The New York Times reported that, “the settlement provides a guarantee that investors who bought initial public offerings form 1998 through 2000 will receive at least $1 billion, before legal fees.”
If investors also score a settlement of $1 billion or more from the brokerage firms that underwrote the IPOs-the companies will have to pay nothing-according to terms of the proposed deal.
Investors will not get any payments until the securities lawsuits against the brokerage firms, including Goldman Sachs, Morgan Stanley, Credit Suisse First Boston, are resolved. “The case proceeds very actively against the underwriter defendants,” said Melvyn I. Weiss, a partner at Milberg Weiss Bershad Hynes & Lerach and the chairman of the plaintiffs’ executive committee in the securities litigation.
“Which investors may share in the settlement will not be known until the class has been certified by Judge Shira A. Scheindline of the United States District Court,” reported the New York Times.
Most the companies involved are of technology concerns including Ask Jeeves, Global Crossing, Aether Systems, Clarent, Coppoer Mountain Networks, VA Software, Marimba, Brocade, Liberate Technologoies and Tivo.
(via New York Times)
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