JPMorgan agrees to settle IPO related suits

By Scott Files

Published on April 21, 2006

The suit alleges that large banks including JPMorgan rigged IPO stock prices during the Internet stock boom of 2000 and 2001.

JPMorgan, the No. 3 U.S. bank by assets, would be the first to resolve the allegations, leaving Morgan Stanley, Credit Suisse, and Goldman Sachs Group Inc. among the remaining defendants. The agreement may pressure more banks to settle, as happened in suits against Enron Corp. and WorldCom Inc.

Joe Evangelisti, a JPMorgan spokesman, said that an agreement had been reached ``in principle.'' "It would have no material adverse effect on our financial results,'' he said.

The agreement is subject to approval by the investors and by two judges presiding over the cases in federal court in New York.

One such class action suit alleges that the banks were involved in manipulating the market in over 300 IPO's for technology companies such as Red Hat, Inc. and Razorfish, Inc. It names dozens of IPO underwriters, including JPMorgan, as defendants. The technology companies also were named in the suit.

In a second suit, 12 banks are accused of colluding in an industry-wide conspiracy to rig IPOs. JPMorgan is also a defendant in that antitrust case.

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