NEW YORK (HedgeWorld)–A plaintiffs’ law firm filed a class action July 15 against Lazard Ltd., various named individuals and Goldman Sachs, claiming that the defendants artificially inflated Lazard’s price at its initial public offering in May 2005 in a scheme said to have involved (unnamed) hedge funds.
The lawsuit, filed in the federal district court for Manhattan, claims that the law firms’ named client, Stanley Sved, and others similarly situated, purchased shares on the open market between May 4 and May 12 and sustained losses as the stock fell in value in subsequent days.
The IPO price was US$25. By May 23 Lazard (NYSE: LAZ) had fallen to below US$21, although it has since regained most of the difference.
Goldman Sachs was Lazard’s lead underwriter. The lawsuit asserts that Bruce Wasserstein, Lazard’s chief executive, “openly pressed Goldman to set the IPO range between ‘$25 and $27 dollars a share.’ However, it was clear to the defendants, all of whom were highly skilled in bringing companies public . . .” that the market wouldn’t support such a price.