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Kai Ryssdal: Some things to remember now before you invest in Yahoo or anything else. Past performance is not an indicator of future returns. It's buy low, sell high, not the other way around. And don't for a second believe that the Supreme Court's your friend.
The Justices ruled today on dot-com IPOs. The legal concept at issue before the justices was a reasonably well-known one: anti-trust. The case was whether investment banks and stock-brokers had a secret handshake going on during the dot com days, when initial stock offerings were a dime a dozen
The justices ruled there should only be one policeman on the IPO beat. And that it should be the Securities and Exchange Commission...not judges who administer federal anti-trust laws. Our Washington bureau chief John Dimsdale reports.
John Dimsdale: Back in the 90s tech boom, Wall Street banks and brokers would get together to plan the IPOs of hot new start-up companies. Frequently, the scenario would involve banks buying additional shares of the new stock after the initial release to keep the momentum going.
But a group of investors sued the Wall Street firms — including Goldman Sachs, Citigroup and Merrill Lynch — charging that their cooperation artificially drove up the price of new stocks and violated anti-trust laws.
Today, the Supreme Court threw out the anti-trust case, saying only the SEC has the power to regulate IPO underwriters.
But Salil Mehra, who used to work in the Justice Department's anti-trust division, says investors don't have as many protections under SEC regulations.
Salil Mehra: The anti-trust laws do bring certain benefits, like treble damages and the possibility of attorneys fees that other areas of law may not get you.
Mehra says today's ruling could make IPO investments riskier and more expensive.
But former SEC commissioner Joseph Grundfest says investors who feel cheated by what they regard as Wall Street collusion have the option of taking their case to the SEC.
Joseph Grundfest: The important thing is not how some plaintiffs' lawyers wish the law might be in a way that could benefit them pretty substantially. The question for the Supreme Court is, what is the law as written today?
Grundfest says those who think anti-trust rules should apply will have to get Congress to change the law.
In Washington, I'm John Dimsdale for Marketplace.