======= Forwarded message (begin) ======= Subject: Class action against Red Hat Date: Sat, 31 Mar 2001 04:18:46 GMT From: gipe@spamMEnot_videotron.ca (Gilles Pelletier) In exchange for the excessive commissions, the complaint alleges, lead underwriter The Goldman Sachs Group, Inc. and underwriters Credit Suisse First Boston Corp. and Merrill Lynch, Pierce, Fenner & Smith, Inc. allocated Red Hat shares to customers at the IPO price of $14 per share. To receive the allocations (i.e., the ability to purchase shares) at $14, the defendant underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Red Hat stock rocketed upward (a practice known on Wall Street as ``laddering'') was intended to (and did) drive Red Hat's share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the underwriters and their customers to reap enormous profits by buying stock at the $14 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $56.75 during its first day of trading. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the defendant underwriters required their customers to ``kick back'' some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. http://biz.yahoo.com/bw/010329/2557.html --- Come on! Everybody knows uncle Bob is a clean as a newborn baby... Hum... I believe they're not very clean, are they? GP -- La Masse Critique Rencontrez Néfertiti, Einstein, Tocqueville, etc. Qu'est-ce que le sionisme? http://pages.infinit.net/mcrit/sionisme.html ======= Forwarded message (end) =======