A federal judge ruled today that a lawsuit brought by thousands of investors, alleging fraud in initial stock offerings, can continue.

U.S. District Judge Shira A. Scheindlin said the plaintiffs presented "a coherent scheme by underwriters, issuers and their officers to defraud the investing public" by concealing tie-in agreements, undisclosed compensation and analyst conflicts.

If the allegations are true, "this scheme offends the very purpose of the securities laws," . Scheindlin said.

The lawsuits named as defendants 55 underwriters, 309 issuers of stock in high-technology and Internet-related companies, and thousands of individuals. Investors allege the value of their holdings plummeted because of fraud in connection with 309 initial public offerings, including those of shares in Theglobe.com, Global Crossing and MP3.com.

The decision came at the stage of litigation in which defendants attempt to have lawsuits dismissed on the grounds that there are insufficient allegations to put before a jury.

Scheindlin said that some of the defendants could be dropped from the case because there was not enough evidence against them but that most would remain.

The Securities and Exchange Commission and NASD have investigated Wall Street's dealings in IPOs. Last month, FleetBoston Financial Corp. agreed to pay $28 million to settle allegations that its Robertson Stephens investment bank got inflated commissions in exchange for improperly distributing hot new stocks to customers. In December 2001, Credit Suisse First Boston agreed to pay $100 million to resolve allegations of abuses in its distribution of IPOs.