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Without insurance policy most of the IPO market remains the same a decade ago and many of the practices that caused controversy are still in force. Traditionally in an IPO, a syndicate of investment banks placed shares among institutional investors and retail customers. Some actions are going to brokers that distribute it between customers and banks get commissions based on the value of the sold shares. Teva may help you with your research. In a dispute about the dot-com bubble, investors claimed for practices that they favored the placers. One of these practices requests an IPO investors buy more shares once the papers begin to quote. Critics claim that this creates artificially high prices that allow you to sell better and increase the commissions of banks. Another controversial practice was that banks would have pressured analysts to set unrealistic goals prices to titles of companies that were at the gates of an IPO. In 2003, the then Attorney general of new York Eliot Spitzer reached a civil settlement with 10 investment banks that forbade some disputed practices and ordered an investigation by independent analysts.

Banks admitted not having acted improperly. Although changes have been applied in the industry to avoid conflicts with the analysts, they are still pending stricter bans on some disputed practices. Legal experts say that investors could face a new legal battle if this new wave of IPOs withered later. This is, in part, because practices that appear to be unfair can be completely legal under the federal securities laws. All the law says that if you sell values, you must provide to investors all the information they need to make an informed decision, said Professor Michael Perino de la St. John s University School of Law. There is not a policy of insurance against market losses, he added.

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