Mailinglist Archive: opensuse (3261 mails)

[Jerry Kreps <jerrykreps@xxxxxxxxxxx>]

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Subject: Class action against Red Hat
Date: Sat, 31 Mar 2001 04:18:46 GMT
From: gipe@xxxxxxxxxxxxxxxxxxxxxx (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
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