Supreme Court holds that the federal securities laws implicitly preclude application of the antitrust laws to the underwriting of initial public offerings

摘要

Purpose – The purpose of this paper is to describe the background and reasoning behind the June 18, 2007 US Supreme Court decision in Credit Suisse Securities (USA) v. Billing et al. Design/methodology/approach – The paper explains the US District Court for the Southern District of New York's dismissal of two antitrust class action lawsuits filed against a group of investment banks in 2002, the reversal by the US Court of Appeals for the Second Circuit in 2005, and the Supreme Court's rejection of the Second Circuit's analysis in 2007. Findings – The Court found that, due to the specialized knowledge required to parse the SEC's rules and distinguish permissible from prohibited conduct, there was a “serious risk” that antitrust courts would produce inconsistent results. The Court also expressed a concern that allowing antitrust claims here would weaken the heightened pleading requirements in the Private Securities Litigation Reform Act, which Congress passed to weed out “umeritorious securities lawsuits.” Practical implications – The decision undoubtedly will have important implications regarding the extent to which the antitrust laws may be applied to other conduct regulated by the securities laws, or in the context of other regulated industries. Orginality/value – The paper provides practical interpretation and guidance by experienced securities lawyers.