High Court Backs Banks In Antitrust Suit on IPOs

The SEC and the Justice Department's Antitrust Division had taken different sides in the lower courts, with the SEC supporting the investment banks and the Antitrust Division backing the plaintiffs.

In the Supreme Court, the Bush administration proposed a compromise that would have sent the case back to the district court for it to decide whether the alleged antitrust violations were separable from conduct the SEC permits. Breyer rejected that suggestion, saying it "does not convincingly address the concerns we have set forth here."

Breyer's opinion was joined by Chief Justice John G. Roberts Jr. and Justices Antonin Scalia, David H. Souter, Ruth Bader Ginsburg and Samuel A. Alito Jr.

Justice John Paul Stevens agreed with the decision but wrote a separate opinion outlining his view that "to suggest that an underwriting syndicate can restrain trade . . . by manipulating the terms of IPOs is frivolous."

Justice Clarence Thomas dissented, arguing that securities law expressly permits plaintiffs to pursue claims based on "all other rights and remedies that may exist in law or equity," including antitrust law.

Justice Anthony M. Kennedy did not take part in the case.

Lane reported from Washington.