In a news conference on Thursday, it was announced that a $1 billion partial settlement figure has been agreed upon with regard to investor lawsuits against 309 technology US companies which went public during the 1990s tech boom, and have been accused of colluding with investment banks to artificially boost their stock prices during initial public offerings (IPOs).
However, no payouts will take place until a separate case between investors and the 55 investment banks which underwrote the deals has been concluded.
According to reports, this has essentially established a floor for recovery for investors. If the settlement figure agreed upon by the banks exceeds $1 billion, then the technology companies themselves will not be obliged to pay out any money. However, if the banks' settlement falls below $1 billion, the issuing companies, and their insurers, will need to make up the shortfall.
The settlement amount must now be approved by the litigants, and by Judge Shira Scheindlin, who is handling the consolidated shareholder action.
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