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$1B SETTLEMENT IN IPO FAVORITISM CASE NEW YORK — A $1 billion partial settlement was announced Thursday in hundreds of securities fraud lawsuits filed in Manhattan against technology companies over misrepresentations in initial public offerings. The terms of the settlement, revealed at a morning news conference by plaintiffs attorneys — including Melvin Weiss of Milberg Weiss Bershad Hynes & Lerach and Stanley Bernstein of Bernstein Liebhard & Lifshitz — resolve investor claims against 309 technology companies. The companies went public during the stock market boom of the 1990s, and their stock price collapsed amid the general meltdown on Wall Street that began in spring 2000. Not included in the settlement are 55 investment banks that handled the initial public offerings. The banks suffered a setback in February when Southern District Judge Shira Scheindlin rejected their motion to dismiss the case, In re Initial Public Offering Securities Litigation, 21 MC 92. The shareholder suits, which were consolidated before Judge Scheindlin to coordinate and decide pretrial motions and discovery, charged that investment banks and technology companies artificially inflated the stock price for hundreds of initial public offerings between January 1998 and December 2000. The plaintiffs claim that the price of stock in initial offerings was driven higher by several factors, including “tie-in agreements” in which the banks required major investors who wanted to participate in hot IPOs to agree to purchase stock at increasingly higher prices, or agree to do the same in another offering. – The New York Law Journal MICROSOFT GETS BREAK ON USING SUN’S JAVA Microsoft Corp. does not have to incorporate Sun Microsystems Inc.’s Java software into its Windows PC operating system and its Web browser, the Fourth Circuit U.S. Court of Appeals ruled Thursday. The court overturned a district court’s preliminary injunction against Microsoft requiring the software giant to carry Sun’s software in its system. The Fourth Circuit concluded in In re Microsoft Corp. Antitrust Litigation, 03-1116, that Sun had failed to show it faced immediate and irreparable injury from Microsoft’s operating system. However, the appeals court upheld a preliminary injunction that prohibits Microsoft from distributing products that infringe Sun’s copyrighted source code. Santa Clara-based Sun filed a $1 billion antitrust suit against Microsoft in March 2002 alleging that Microsoft created and distributed its own version of the Java computer programming language, which isn’t compatible with Sun’s version. Sun also accused Microsoft of forcing other companies to distribute the incompatible version as well. Sun’s action hinged on a federal ruling issued in 2001 that Microsoft had abused its monopoly power in the computer industry. Sun’s attorney Lloyd “Rusty” Day Jr., of Day Casebeer Madrid & Batchelder, could not be reached for comment. – Brenda Sandburg PROSKAUER SET TO HIRE N.Y. LITIGATION TEAM NEW YORK — Proskauer Rose is expected to announce as early as today that it has brought aboard the majority of the lawyers from well-known litigation boutique Solomon, Zauderer, Ellenhorn, Frischer & Sharp, with a smaller group breaking off to join the New York office of Piper Rudnick. Partners at Proskauer were still voting on the acquisition last night, but Chairman Alan Jaffe said the outcome appeared certain. Though 600-lawyer Proskauer has figured in many other recent merger rumors, the arrival of 23 Solomon, Zauderer lawyers will be the firm’s largest such move to date and was the product of months of discussions, he said. “These are really high quality lawyers with a lot of big-case litigations under their belt,” said Jaffe. “They will add to the breadth and depth of our litigation department.” Though just over 30 lawyers, Solomon Zauderer has become one the city’s better-known litigation shops since its founding in 1981 as Stein, Zauderer, Ellenhorn, Frischer & Sharp. The name partners largely arrived at the firm from large firms such as Cravath, Swaine & Moore; Paul, Weiss, Rifkind, Wharton & Garrison; and Kaye Scholer. – The New York Law Journal

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