Appeals court revives 24 lawsuits over IPOs
SAN FRANCISCO (Reuters) - A federal appeals court revived 24 lawsuits against a group of bank underwriters accused of conflicts of interest in initial public offerings.
The lawsuits contended that the investment banks, including JPMorgan Chase & Co and Morgan Stanley, engaged in prohibited "short-swing" transactions related to initial public offerings in 1999 and 2000, according to an opinion from the 9th U.S. Circuit Court of Appeals on Thursday.
The plaintiffs contend that the underwriters coordinated their activities with insiders at issuing companies in order to obtain financial benefits from post-IPO increases in the stock price.
A lower court in Seattle, Washington, had ruled that the 24 lawsuits were time-barred, but the appeals court disagreed.
However, the 9th Circuit upheld the Seattle federal court's dismissal of 30 other lawsuits involving some of the issuing companies over the short-swing transactions.
JPMorgan Chase and Morgan Stanley did not immediately comment.
The case in the 9th U.S. Circuit Court of Appeals in San Francisco is 09-35363.
(Reporting by Dan Levine, editing by Gerald E. McCormick)