The Supreme Court of the United States today ruled that investors cannot sue Wall Street banks for anticompetitive practices related to the pricing of initial public offerings that occurred during the late-'90s internet boom. The ruling reverses a lower court's decision that allowed the antitrust suit to move forward.

The 7-1 decision is an important one for Wall Street firms, which would have faced triple the damages under antitrust laws as they would under traditional securities laws. Most of the largest banks were named as defendants, including Credit Suisse First Boston, J.P. Morgan Chase, Citigroup, and Merrill Lynch.

Investors alleged that the banks conspired to artificially drive up the price of 900 new offerings after they began trading, in order to provide better prices for their favored customers. Those same investors also said the banks agreed to sell shares to certain clients at more favorable prices in exchange for the promise that these clients would buy more shares at a higher price in the future, a tactic called laddering.

As a result, investors claim, the average price of the offerings rose 70 percent on their first day of trading in both 1999 and 2000.

The lone dissenter in the court's decision was Justice Clarence Thomas, who said the language in the securities laws permits this kind of antitrust lawsuit.