Yet Another Lawsuit Against Dot Com IPO Banks Shot Down
from the try,-try-again dept
Ever since the dot com bubble burst, there have been investors looking for any kind of lawsuit to reclaim some of the money they lost speculating on the likes of Pets.com and TheGlobe.com. Of course, what they don't want to admit is that any kind of stock investment is a risky proposition. They ignored all that during the hype, because there was so much money flowing and everything only seemed to go up. The latest in a long line of lawsuits has now been shot down by the Supreme Court. This lawsuit was about whether the big Wall Street banks that took companies public in those days violated anti-trust rules by requiring investors live up to certain promises in order to get into a hot IPO. The conditions included promises to buy more shares later at a higher price to keep the upward spiral going, paying "unusually" high commissions and agreeing to buy less desirable stock as well. Of course, the investors who agreed to these conditions knew what they were doing -- but they made the calculation that the booming dot com mania would outweigh the risks. It turns out they were wrong -- but that's part of the risk that you take when investing (especially in highly speculative dot coms who have only been around for a few months and show no track record). This just seems like sour grapes for investors who bought into the hype and learned an expensive lesson about how the stock market works.