Credit Suisse Securities v. Billing: Supreme Court Grants Securities Industry Broad Immunity in Antitrust Lawsuits

The United States Supreme Court ruled yesterday in Credit Suisse Securities v. Billing that securities laws create broad immunity from antitrust lawsuits, ruling that antitrust laws do not apply to the syndication and marketing techniques used in initial public offerings. The decision will make it more difficult for plaintiffs to bring antitrust claims where the activity at issue is regulated by the Securities and Exchange Commission (SEC).

The case concerned alleged agreements between underwriters and institutional investors that inflated the prices of securities after initial public offerings. The complaint alleged that underwriters had agreed that, in return for allocations in an initial offering, they would exact a variety of concessions from their customers, including agreements to purchase securities in subsequent offerings or in the aftermarket, or to share the benefits of the expected IPO “pop” with the underwriters. The district court dismissed the complaint, relying on the doctrine of “implied repeal” (also known as “implied immunity”), holding that the antitrust laws could not apply to an area so comprehensively regulated by the SEC. The Second Circuit reversed, finding no basis for a conclusion that that Congress intended to sweep away the antitrust laws with respect to the conduct alleged.

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