Full opinion text
MEMORANDUM AND ORDER PAULEY, District Judge. In this consolidated class action, two putative classes of plaintiffs seek redress for alleged antitrust injuries suffered as a result of purchasing initial public offering (“IPO”) shares of certain technology-related securities (the “Class Securities”) at artificially-inflated prices during the “dot-com boom” of the late 1990s. The first putative class (the “Sherman Act Plaintiffs”) alleges violations of the Sherman Act, 15 U.S.C. § 1 et seq., and various state antitrust laws, by ten investment banks that underwrote the majority of the technology-related IPOs during this period. The second putative class (the “Robinson-Patman Act Plaintiffs”) alleges that these same practices, as well as those favoring long-term investors, constitute commercial bribery under Section 2(c) of the Robinson-Patman Act, 15 U.S.C. § 13(c). Currently pending before this Court is the Underwriter Defendants’ consolidated motion, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss this action. For the reasons set forth below, their motion is granted on the ground that the conduct alleged by the Sherman Act Plaintiffs and the Robinson-Patman Act Plaintiffs is impliedly immune from antitrust scrutiny. Any other result would force the defendants to navigate the Scylla of securities regulation and Charybdis of antitrust law. BACKGROUND I. The Sherman Act Allegations The gravamen of the Sherman Act Plaintiffs’ Consolidated Amended Class Action Complaint (the “Sherman Act Complaint” or “Sherman Act Compl.”) is that the Underwriter Defendants conspired to inflate the aftermarket prices of the Class Securities by using the fixed price equity underwriting system (the “syndicate system”) to foist anticompetitive charges, as well as impermissible aftermarket “laddering” and “tie-in” arrangements, on direct purchasers of IPO shares in violation of federal and state antitrust laws. (Sherman Act Compl. ¶ 1.) Specifically, the Sherman Act Plaintiffs allege that the Underwriter Defendants: (1) “required customers to pay ... the IPO price for the relevant Class Security plus additional anticompetitive charges” (Sherman Act Compl. ¶ 4(a)); (2) “required customers to agree, in order to obtain IPO shares of Class Securities, to make ‘tie-in purchases’ of such Class Securities in the aftermarket at levels above the respective IPO prices,” a process known as “laddering,” in order to artificially inflate the aftermarket prices of the IPOs (Sherman Act Compl. ¶¶ 4(b), 6-7); and (8) utilized the preexisting syndicate system to implement and further their antitrust conspiracy, through, inter alia, “road shows” and other information sharing activity (Sherman Act Compl. ¶ 5). The anticompetitive activity alleged includes, inter alia, “non-competitively determined commissions on the purchase and sale of other securities, purchases of an issuer’s shares in the follow-up or ‘secondary’ public offerings (for which the underwriters would earn underwriting discounts), commitments to purchase other, less attractive securities, or the laddered purchases.” (Sherman Act Compl. ¶ 6.) According to the Sherman Act Plaintiffs, the purpose and effect of this conspiracy was to: (1) increase the consideration that aftermarket purchasers paid for the Class Securities above the levels that would have existed in a competitive market (Sherman Act Compl. ¶¶ 7-8, 70-74); and (2) create artificial demand for the Class Securities, thereby inflating their price with a concomitant increase in underwriting charges, commissions, and investment banking fees. (Sherman Act Compl. ¶¶ 70-74.) The Sherman Act Plaintiffs also allege violations of various state antitrust laws based on the same conduct. (Sherman Act Compl. ¶¶ 84-109.) II. The Robinson-Patman Act Allegations The Robinson-Patman Act Plaintiffs allege violations of Section 2(c) of the Robinson-Patman Act, 15 U.S.C. § 13(c), by most of the Underwriter Defendants, as well as certain institutional investors. In their complaint (the “Robinson-Patman Act Complaint” or “Robinson-Patman Act Compl.”), the Robinson-Patman Act Plaintiffs allege the same conduct as the Sherman Act Plaintiffs (Robinson-Patman Act Compl. ¶¶ 56-63, 90, 107-115), but add allegations that the Underwriter Defendants favored long-term investors over “flippers” when allocating “hot issue” IPO shares. (Robinson-Patman Act Compl. ¶¶ 64-71, 74-89.) According to the Robinson-Patman Act Plaintiffs, this preferential treatment “tends to assure an excess of purchasers over sellers and to drive the market price of the securities upward.” (Robinson-Patman Act Compl. ¶ 67.) The Robinson-Patman Act Plaintiffs further allege that the Institutional Defendants agreed not to “flip” their shares in exchange for favorable IPO allocations, and paid or received money for such allocations. (Robinson-Patman Act Compl. ¶¶ 24-85, 74-89,116-26.) According to the Robinson-Patman Act Plaintiffs, these combined actions violate the commercial bribery prohibitions of Section 2(c) of the Robinson-Patman Act, 15 U.S.C. § 13(c). DISCUSSION The Underwriter Defendants move to dismiss both the Sherman Act Complaint and Robinson-Patman Act Complaint on the grounds that: (1) the conduct alleged is immune from attack under federal and state antitrust laws; (2) plaintiffs lack antitrust standing; (3) plaintiffs’ conclusory allegations of conspiracy are insufficient to state a valid claim; (4) plaintiffs fail to allege a relevant market; and (5) plaintiffs’ state law claims are fatally defective. This Court’s inquiry begins and ends with the doctrine of implied immunity. I. Standards For A Motion To Dismiss On a motion to dismiss, a court must accept the material facts alleged in the complaint as true and construe all reasonable inferences in a plaintiffs favor. Official Comm. of Unsecured Creditors of Col- or Tile, Inc. v. Coopers & Lybrand, LLP, 322 F.3d 147, 158 (2d Cir.2003). A court should not dismiss a complaint for failure to state a claim unless “it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); accord Jaghory v. New York State Dep’t of Educ., 131 F.3d 326, 329 (2d Cir.1997). “This generous approach to pleading applies in the antitrust context.” Hamilton Chapter of Alpha Delta Phi, Inc. v. Hamilton Coll., 128 F.3d 59, 63 (2d Cir.1997). Indeed, “[i]n antitrust cases in particular, the Supreme Court has stated that ‘dismissals prior to giving the plaintiff ample opportunity for discovery should be granted very sparingly.’ ” George Haug Co. v. Rolls Royce Motor Cars, Inc., 148 F.3d 136, 139 (2d Cir.1998) (quoting Hosp. Bldg. Co. v. Trs. of Rex Hosp., 425 U.S. 738, 746, 96 S.Ct. 1848, 48 L.Ed.2d 338 (1976)). However, a Court must not “assume that the [plaintiff] can prove facts that it has not alleged or that the defendants have violated the antitrust laws in ways that have not been alleged.” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983). “Finally, a complaint can be dismissed for failure to state a claim pursuant to a Rule 12(b)(6) motion raising an affirmative defense ‘if the defense appears on the face of the complaint.’ ” Color Tile, 322 F.3d at 158 (quoting Pani v. Empire Blue Cross Blue Shield, 152 F.3d 67, 74 (2d Cir.1998)). Defendants’ assertion of implied immunity is an affirmative defense that appears on the face of the complaint, and as such is properly addressed at the motion to dismiss stage. In re Stock Exch. Options Trading Antitrust Litig., 317 F.3d 134, 150-53 (2d Cir.2003) (“Stock Exchanges Options”) (“Although the doctrine of implied repeal is sometimes described in terms of the district court’s ‘antitrust jurisdiction,’ we think it is more properly viewed as conferring an immunity that is an affirmative defense.”) (internal citation omitted). II. The Doctrine Of Implied Immunity The doctrine of implied immunity is grounded in the shibboleth that Congress does not intentionally vitiate its own regulatory mandates, and therefore “antitrust laws do not come into play when they would prohibit an action that a regulatory scheme permits.” Finnegan v. Campeau Corp., 915 F.2d 824, 827 (2d Cir.1990). At the intersection of securities regulation and antitrust law, the doctrine of implied immunity provides that federal securities laws impliedly repeal the Sherman Act with respect to certain conduct, and confer immunity from liability under the antitrust laws for that conduct. The doctrine, and the analytical framework to determine whether it applies in a particular situation, springs from a trilogy of Supreme Court opinions. See United States v. Nat’l Ass’n of Sec. Dealers, Inc., 422 U.S. 694, 95 S.Ct. 2427, 45 L.Ed.2d 486 (1975) (“NASD”); Gordon v. New York Stock Exch., Inc., 422 U.S. 659, 95 S.Ct. 2598, 45 L.Ed.2d 463 (1975); Silver v. New York Stock Exch., 373 U.S. 341, 83 S.Ct. 1246, 10 L.Ed.2d 389 (1963). Silver, the earliest of the cases, involved an antitrust challenge to a New York Stock Exchange (“NYSE”) order enforcing an internal rule prohibiting direct communications with non-member firms. Silver, 373 U.S. at 343-44, 83 S.Ct. 1246. The Supreme Court held that the Securities Exchange Act of 1934, 15 U.S.C. § 78a, et seq. (the “Exchange Act”), did not impliedly repeal the antitrust laws with respect to this NYSE order because the Securities and Exchange Commission (the “SEC” or the “Commission”) lacked jurisdiction “to review particular instances of enforcement of exchange rules.” 373 U.S. at 364-67, 83 S.Ct. 1246. The Court determined that, given the SEC’s lack of authority over internal NYSE rules, there was no potential for conflict between the SEC’s regulatory power and the antitrust laws, Silver, 373 U.S. at 358, 83 S.Ct. 1246, and that “there was a need for applicability of the antitrust laws, for if those laws were deemed inapplicable the challenged conduct would be unreviewable,” Stock Exchanges Options, 317 F.3d at 145 (discussing Silver, 373 U.S. at 358-59, 83 S.Ct. 1246). The Court noted, however, that “[sjhould review of exchange self-regulation be provided through a vehicle other than the antitrust laws, a different case as to antitrust exemption would be presented.” Silver, 373 U.S. at 360, 83 S.Ct. 1246. Recently, the Second Circuit noted that Gordon, decided more than a decade after Silver, was such a “different case.” Stock Exchanges Options, 317 F.3d at 145. Gordon examined the practice of securities exchanges and their members employing fixed commission rates. 422 U.S. at 660-61, 95 S.Ct. 2598. The Supreme Court held that implied immunity was warranted because the SEC had expansive regulatory authority over commission rate practices, which it had exercised actively. Gordon, 422 U.S. at 690, 95 S.Ct. 2598 (“Although SEC action in the early years appears to have been minimal, it is clear that since 1959 the SEC has been engaged in deep and serious study of the commission rate practices of the exchanges and of their members.... ”). The Court reasoned that even though the fixing of commission rates was prohibited by both the securities laws and antitrust laws at the time the case was heard, the SEC had the statutory authority to permit such conduct in the future should it choose to do so. Gordon, 422 U.S. at 690-91, 95 S.Ct. 2598. Thus, “[i]f antitrust courts were to impose different standards or requirements, the exchanges might find themselves unable to proceed without violation of the mandate of the courts or of the SEC.” Gordon, 422 U.S. at 689, 95 S.Ct. 2598. The regulatory conflict in Gordon was more than theoretical because of the distinct mandates of the securities and antitrust laws. “Such different standards are likely to result because the sole aim of antitrust legislation is to protect competition whereas the SEC must consider, in addition, the economic health of the investors, the exchanges, and the securities industry.” Gordon, 422 U.S. at 689, 95 S.Ct. 2598. The Court concluded that, as a result, the “[ijnterposition of the antitrust laws, which would bar fixed commission rates as per se violations of the Sherman Act, in the face of positive SEC action, would preclude and prevent the operation of the Exchange Act as intended by Congress and as effectuated through SEC regulatory activity.” Gordon, 422 U.S. at 691, 95 S.Ct. 2598. Thus, “failure to imply repeal would render nugatory the legislative provision for regulatory agency supervision of exchange commission rates.” Gordon, 422 U.S. at 691, 95 S.Ct. 2598. In NASD, decided the same day as Gordon, the Court determined that Congress’ grant of regulatory authority to the SEC was “sufficiently pervasive” to confer on the defendants immunity from antitrust liability for activities restricting the transferability of mutual fund shares in the secondary market. NASD, 422 U.S. at 732, 95 S.Ct. 2427. Although the Court found that the NASD’s agreement to restrict the sale of mutual fund shares and fix their prices in the secondary market was not explicitly authorized under Section 22(f) of the Investment Company Act of 1940 (the “1940 Act”), 15 U.S.C. § 80a-22(f), Section 22(f) did authorize funds to impose transferability or negotiability restrictions subject to SEC disapproval. NASD, 422 U.S. at 729-30, 95 S.Ct. 2427. Further, the Court held that the combination of the Maloney Act, 15 U.S.C. § 78o-3, and the 1940 Act conferred upon the SEC “broad regulatory authority ... to monitor the activities [at issue], and the history of [SEC] regulations suggests no laxity in the exercise of this authority. To the extent that any of [defendants’] ancillary activities frustrate the SEC’s regulatory objectives it has ample authority to eliminate them.” NASD, 422 U.S. at 734, 95 S.Ct. 2427. Thus, the “pervasive regulatory scheme” created by the 1940 Act and the Maloney Act, which permitted transferability restrictions unless prohibited by the SEC, necessitated a finding of implied immunity. NASD, 422 U.S. at 732, 95 S.Ct. 2427. Again, the Court held that immunity was required so that the SEC “could carry out [its] responsibility free from the disruption of conflicting judgments that might be voiced by courts exercising jurisdiction under the antitrust laws.” NASD, 422 U.S. at 734-35, 95 S.Ct. 2427. When read together, Silver, Gordon and NASD yield “two narrowly-defined situations” in which the doctrine of implied immunity will apply: “ ‘first, when an agency, acting pursuant to a specific Congressional directive, actively regulates the particular conduct challenged [the Gordon scenario], ... and second, when the regulatory scheme is so pervasive that Congress must be assumed to have foresworn the paradigm of competition [the NASD scenario].’ ” Stock Exchanges Options, 317 F.3d at 147 (quoting Northeast ern Tel. Co. v. AT & T, 651 F.2d 76, 82 (2d Cir.1981)). While the Supreme Court has identified these two situations in which implied repeal will apply, “[i]t is a cardinal principle of construction that repeals by implication are not favored.” United States v. Borden Co., 308 U.S. 188, 198, 60 S.Ct. 182, 84 L.Ed. 181 (1939). Therefore, “only where there is a ‘plain repugnancy between the antitrust and regulatory provisions’ will repeal be implied.” Gordon, 422 U.S. at 682, 95 S.Ct. 2598 (quotation omitted); accord Stock Exchanges Options, 317 F.3d at 148 (“To be sure, antitrust immunity is not to be presumed from the mere existence of overlapping authority; rather the analysis must focus on the ‘potential’ for ‘conflicts between the antitrust laws and a[n authorized] regulatory scheme.’ ”) (emphasis and alteration in original) (quoting Strobl v. New York Mercantile Exck, 768 F.2d 22, 27 (2d Cir.1985)). Accordingly, “implied immunity analysis requires a fairly fact-specific inquiry into the nature and extent of regulatory action that allegedly conflicts with antitrust law.” Friedman v. Salomon/Smith Barney, Inc., 313 F.3d 796, 799 (2d Cir.2002), cert. denied, 71 U.S.L.W. 3791, — U.S. -, 124 S.Ct. 152, — L.Ed.2d - (2003) (No. 02-1808); accord Northeastern Tel., 651 F.2d at 83 (implied immunity “must be evaluated in terms of the particular regulatory provision involved, its legislative history, and the administrative authority exercised pursuant to it”). Two recent Second Circuit decisions, Friedman and Stock Exchanges Options, have clarified the implied immunity doctrine in the context of the interrelationship between securities regulation and the antitrust laws. The Second Circuit in Friedman concluded that, while the SEC did not expressly authorize broker-dealer restrictions designed to discourage “flipping” of IPO shares in order to stabilize prices in the aftermarket, implied immunity from antitrust regulation was proper. 313 F.3d at 803. The court reasoned that “allowing an antitrust lawsuit to proceed would conflict with Congress’ implicit determination that the SEC should regulate the alleged anti-competitive conduct.” Friedman, 313 F.3d at 801. In reaching its determination, the Second Circuit reviewed the “SEC’s regulation of price stabilization in both the distribution and aftermarket phases of public offerings.” Friedman, 313 F.3d at 801. The Friedman court noted that the Exchange Act gave the Commission authority to regulate the restrictive practices alleged by the plaintiffs, and that the Commission had repeatedly acknowledged its awareness of such conduct. 313 F.3d at 802. In addition, the Second Circuit noted that the Commission had exercised its authority over the conduct even though it had never prohibited it, because the Exchange Act “allows price stabilization practices that the SEC does not prohibit.” Friedman, 313 F.3d at 802. Discussing the conflict requirement inherent in consideration of implied immunity, the Friedman court held that: implied immunity exists where allowing parallel proceedings on antitrust and SEC tracks would subject defendants to conflicting mandates. The source of the conflict may, but need not, involve affirmative SEC action. Conflict also can exist where the SEC has jurisdiction over the challenged activity and deliberately has chosen not to regulate it. 313 F.3d at 801. Thus, the Second Circuit clarified that the “plain repugnancy” required to trigger implied immunity need not be a firelight between the antitrust laws and securities regulation, but rather “extends to potential as well as actual conflicts.” Friedman, 313 F.3d at 799. In the wake of Friedman, the Second Circuit in Stock Exchanges Options upheld antitrust immunity for the practice of restricting equity options trading to a single exchange. Stock Exchanges Options, 317 F.3d at 153. Although the conduct alleged was prohibited by both the antitrust laws and securities laws at the time the case was decided, the Second Circuit held the conduct impliedly immune on the grounds that “the SEC has ample statutory authority, which it has repeatedly exercised, to regulate the listing and trading of equity options,” and the specific conduct at issue fell within that broader authority. Stock Exchanges Options, 317 F.3d at 150. As a result, “the antitrust laws conflict with an overall regulatory scheme that empowers the agency to allow conduct that the antitrust laws would prohibit.” Stock Exchanges Options, 317 F.3d at 149. The Stock Exchanges Options court began by examining the history of the SEC’s regulation of equity options trading, noting that the SEC has vacillated between allowing and prohibiting multiple option listing numerous times since the trading of options on national exchanges began in 1973. Stock Exchanges Options, 317 F.3d at 139-142. The Commission’s oscillating approach to multiple option listing assisted the Stock Exchanges Options court in characterizing the broad scope of the SEC’s authority: [T]he SEC has ample authority, which it has repeatedly exercised, to regulate the listing and trading of equity options. It has at times encouraged multiple listing and at times disapproved of that practice .... Although the SEC’s present stance is that agreements for exclusive listing are forbidden, the Commission has the power to alter that position if it concludes that other concerns within its domain outweigh the need to protect competition. We see no way to reconcile that SEC authority, which may be exercised to permit agreements for exclusive listing of equity options, with the antitrust laws. 317 F.3d at 150. Like the Sherman Act Plaintiffs, the plaintiffs in Stock Exchanges Options argued that the conduct at issue should not be immune from antitrust scrutiny because it was expressly prohibited by both SEC regulations and the antitrust laws at the time the action was filed. 317 F.3d at 144. The Second Circuit disagreed, holding that the broad scope of the SEC’s authority over the listing and trading of equity options, rather than the fortuity of timing, was the touchstone for implied immunity: Although plaintiffs contend that an implied repeal is not needed to avoid conflicts here because exclusivity agreements are now prohibited by both the antitrust laws and the SEC, that contention misperceives the proper analytical focus. The appropriateness of an implied repeal does not turn on whether the antitrust laws conflict with the current view of the regulatory agency; rather it turns on whether the antitrust laws conflict with an overall regulatory scheme that empowers the agency to allow conduct that the antitrust laws would prohibit. Stock Exchanges Options, 317 F.3d at 149. Thus, the Second Circuit in Stock Exchanges Options held the antitrust laws impliedly repealed based not on the existence of a current conflict between the particular SEC regulations and antitrust laws, but rather on the potential that future SEC regulation could conflict with the antitrust laws and expose defendants to inconsistent mandates. Citing Gordon and NASD, the Stock Exchanges Options court reasoned that: “[P]ermitting courts throughout the country to conduct their own antitrust proceedings would conflict with the regulatory scheme authorized by Congress, ” and that the “[i]mplied repeal of the antitrust laws is, in fact, necessary to” avoid “rendering] nugatory the legislative provision for regulatory agency supervision. ” Thus, the proper focus is not on the Commission’s current regulatory position but rather on the Commission’s authority to permit conduct that the antitrust laws would prohibit. Stock Exchanges Options, 317 F.3d at 149 (emphasis in original) (internal quotations omitted). Friedman and Stock Exchanges Options have focused the inquiry concerning implied immunity by counseling that the power to regulate is tantamount to regulation. Thus, the Gordon threshold that antitrust laws and securities regulation be “plainly repugnant” is satisfied by potential, as well as actual, conflicts. See Stock Exchanges Options, 317 F.3d at 149; Friedman, 313 F.3d at 801. III. Amicus Curiae Submissions This Court invited, and received, amicus curiae briefs from the SEC and the Department of Justice, Antitrust Division (the “DOJ”), addressed to the issue of implied immunity. The SEC argues that implied immunity is required in this case, noting its past and continuing regulation of the IPO process, the syndicate system and various nominally anticompetitive price stabilization techniques. (Memorandum Amicus Curiae of the SEC (“SEC Amicus Br.”), at 39-40.) The DOJ, in contrast, argues that implied immunity is improper in this case, and that antritrust scrutiny of the alleged conduct is necessary. (Memorandum of the United States as Amicus Curiae (“DOJ Amicus Br.”) at 23.) In addition, this Court received an amicus curiae submission from the Office of the Attorney General of the State of New York, Antitrust Division (the “NYAG”), which largely echoes the position of the DOJ. (N.Y.AG’s letter submission as ami-cus curiae (“NYAG Amicus Br.”), at 14.) IV. Implied Immunity With Respect To The Sherman Act Plaintiffs In its amicus brief, the SEC asserts that “[t]he IPO allocation and commission practices challenged [by the Sherman Act Plaintiffs] fall within the very heart of the Commission’s regulatory authority over underwriting syndicates under both the Securities Act of 1933, 15 U.S.C. § 77a, et seq. [the “Securities Act”], and the [Exchange Act], and they are comprehensively regulated.” (SEC Amicus Br. at 1.) While this Court agrees with the SEC’s contention that its regulatory authority over the conduct alleged in the Sherman Act Complaint is pervasive, it need not reach the question of whether there should be implied immunity under the NASD scenario. The reason is that the conduct alleged by the Sherman Act Plaintiffs is immune from antitrust scrutiny under a Gordon analysis, as informed by Friedman and Stock Exchanges Options. In the first instance, the SEC explicitly permits much of the conduct alleged in the Sherman Act Complaint. More importantly, the SEC, through application of its broad regulatory authority over the spectrum of conduct related to securities offerings, is empowered to regulate the conduct alleged by the Sherman Act Plaintiffs. It is this sweeping power to regulate that spawns the potential conflict with the antitrust laws that, under Friedman and Stock Exchanges Options, requires a finding of implied immunity. A. Underwriter Conduct Permitted By The Securities Regulatory Regime When the inflammatory characterizations are centrifuged from the Sherman Act Complaint, much of the conduct alleged is authorized under the current securities regulatory regime. For example, the Sherman Act Plaintiffs assert that the Underwriter Defendants engaged in a number of joint activities, including that: (1) the Underwriter Defendants “still regularly combined with one another during the Class Period into underwriting syndicates” (Sherman Act Compl. ¶ 38); (2) the Underwriter Defendants engaged in a secret “centralizing agreement” that the lead underwriter “could itself distribute all the shares of each Class Security” (Sherman Act Compl. ¶ 39); and (3) syndicate members who did not sell all of their allotment “nevertheless shared in the underwriters’ discount” (Sherman Act Compl. ¶ 39). Those allegations, however, are nothing more than a theater-wide attack on the syndicate system, the predominant structure for the public distribution of equities since the infancy of the securities markets. See United States v. Morgan, 118 F.Supp. 621, 635 (S.D.N.Y.1953) (“[T]he syndicate system as a means of issuing and distributing security issues was in use at least as early as the 1890’s.”). While the SEC’s regulation of the syndicate system is generally accomplished through its direct regulation of the NASD and other self-regulatory organizations (“SROs”), the Commission itself expressly recognizes the validity of the syndicate system. See, e.g., Exchange Act Release No. 17371, 21 S.E.C. Dkt. 930 (Dec. 12, 1980) (the “Papilsky Release”) (providing an overview of the syndicate system and describing the “broad discretionary authority” typically granted to the managing underwriter by the “agreement among underwriters ... that establishes the obligations of each [syndicate] member”). However, it is the SEC’s pervasive regulatory oversight over the NASD, “the only ‘national securities association’ registered with the SEC pursuant to 15 U.S.C. § 78o-3,” Domestic Sec., Inc. v. SEC, 333 F.3d 239, 242 (D.C.Cir.2003), and other SROs, that is the cornerstone of the SEC’s authority over the syndicate system. See NASD, 422 U.S. at 732, 95 S.Ct. 2427 (SEC has “pervasive” authority over the NASD). As a registered national securities association under the 15 U.S.C. § 78o~3, the NASD comprehensively and actively regulates syndicates — including their formation, communications among syndicate members, commission structure, allocation of securities and fee arrangements — pursuant to rules that are formally reviewed by the SEC and subject to its approval. See 15 U.S.C. § 78s(b) (requiring that all rules promulgated by SROs be approved by the SEC, and setting out procedures for review thereof); accord Domestic Sec., 333 F.3d at 241 (“Under the [Exchange Act], the [SEC] must approve any changes to the rules of the [NASD].”). For example, NASD Rule 2110 and interpretation IM-2110-5, which prohibit certain forms of price coordination and intimidation as “inconsistent with just and equitable principles of trade,” explicitly disclaim any limitation, constraint or other restriction on the “freedom” of broker-dealers to “engage in any underwriting (or any syndicate for the underwriting) of securities to the extent permitted by the federal securities laws.” NASD Manual, IM-2110-5: Anti-Intimidation/Coordination; see also NASD Manual, Rule 2110: Standards of Commercial Honor and Principles of Trade. Further, NASD Rule 2110 and interpretation IM-2110-1 combine to require all participants in an offering syndicate to make bona fide public distributions, and prohibit them from either withholding securities for their own benefit or using an allocation of securities to reward persons for future business. NASD Manual, Rule 2110; NASD Manual, IM-2110-1: Free-Riding and Withholding. However, that same combination of NASD Rule 2110 and interpretation IM-2110-1 explicitly permits syndicate participants to engage in communications “for the purpose of exploring the possibility of a purchase or sale of that security, and to negotiate for or agree to such purchase or sale.” NASD Manual, IM-2110-1. A number of other NASD rules and interpretations regulate various aspects of the syndicate system, including the actions of its broker-dealer participants. In addition to a general indictment of the syndicate system, the Sherman Act Plaintiffs brand as conspiratorial joint actions by the Underwriter Defendants during the “road show” process. For example, to support their conspiracy claim, the Sherman Act Plaintiffs allege that defendants: (1) “jointly and individually, hosted ‘road shows’ during which customers were introduced to the issuer and its managers and during which the offering was described”; (2) “conducted telephone calls, meetings and other regular communications prior to the IPOs of Class Securities;” and (3) “at times jointly, made inquiries of customers or others interested in purchasing Class Securities concerning the number of shares that such person would be willing to purchase in the aftermarket and the prices such person would be willing to pay for such shares.” (Sherman Act Compl. 1154.) Each of these actions, however, are expressly permitted during the “road show” period. While Section 5 of the Securities Act, 15 U.S.C. § 77e, imposes restrictions on nonexempt offerings of securities — including prohibitions on offers before a registration statement is filed, as well as limitations on oral and written communications with potential buyers after the registration statement is filed but before it becomes effective — Section 2(a)(3) excludes from those offering restrictions certain communications, including “preliminary negotiations or agreements between an issuer ... and any underwriter or among underwriters who are or are to be in privity of contract with an issuer.” 15 U.S.C. § 77b(a)(3). In addition, Securities Act Rule 134 permits broker-dealers to collect from potential buyers “indications of interest” in an IPO prior to its issuance. 17 C.F.R. § 230.134(d) (permitting broker-dealers to “solicit from the recipient of the communication an offer to buy the security or request the recipient to indicate ... whether he might be interested in the security”). Apart from their indiscriminate assault on the syndicate system and various “road show” practices, the Sherman Act Plaintiffs also seek to support their claim of an “unlawful agreement” by alleging that the Underwriter Defendants “frequently communicated with one another as members of the [NASD] where they jointly participated in the trading of securities on ... NASDAQ, and are members of various national and regional exchanges, including the [NYSE] ... and the American Stock Exchange (‘AMEX’).” (Sherman Act Compl. ¶ 47.) However, the Sherman Act Plaintiffs ignore the fact that the SEC not only permits such conduct, it requires that broker-dealers be members of, or employ, one of these SROs. In addition, the Sherman Act Plaintiffs allege that the Underwriter Defendants communicated and worked together as market makers (Sherman Act Compl. ¶ 45), conduct that is also expressly-permitted under the current securities regulatory regime. As each of the aforementioned activities alleged in the Sherman Act Complaint are expressly permitted under the current securities regulatory regime, a determination by a comet that any of them constituted an antitrust violation would bring the antitrust laws into direct conflict with the securities laws. This species of “plain re-pugnancy between the antitrust and regulatory provisions” would, in the absence of a finding of implied immunity, “render nugatory the legislative provision for regulatory agency supervision.” Gordon, 422 U.S. at 682, 691, 95 S.Ct. 2598. B. The SEC’s Power To Regulate The Conduct Alleged In The Sherman Act Complaint Although much of the conduct alleged in the Sherman Act Complaint is expressly permitted under the current securities regulatory regime, see supra Section IV.A, certain alleged conduct could be deemed prohibited under both the securities laws and the antitrust laws. For example, the Sherman Act Plaintiffs allege impermissible “tie-in” and “laddering” arrangements (Sherman Act Compl. ¶¶ 4(b), 7), as well as “commissions on the purchase and sale of other securities, purchases of an issuer’s shares in the follow-up or ‘secondary’ public offerings (for which the underwriters would earn underwriting discounts), [and] commitments to purchase other, less attractive securities, or the laddered purchases.” (Sherman Act Compl. ¶ 6.) While this conduct, under certain circumstances, could be deemed violative of the securities laws, such a finding would not be fatal to a conferral of implied immunity. This is because the SEC has broad power to regulate the conduct at issue in this case, and therefore potential conflicts exist even between activities that are, at the current time, prohibited under both the securities and antitrust regulatory regimes. Under the Supreme Court trilogy of Silver, Gordon and NASD, as interpreted by the Second Circuit in Friedman and Stock Exchanges Options, such potential conflicts require a finding of implied immunity. See Stock Exchanges Options, 317 F.3d at 149 (“[T]he proper focus is not on the Commission’s current regulatory position but rather on the Commission’s authority to permit conduct that the antitrust laws would prohibit.”); Friedman, 313 F.3d at 799 (“[T]he ‘plain repugnancy’, or conflict, between antitrust and securities laws extends to potential as well as actual conflicts.”)- The broad general authority to regulate IPO allocation and underwriter commission practices is granted to the SEC by: (1) the Securities Act, under which the Commission regulates the offering process; (2) the Exchange Act, under which the Commission defines and regulates manipulative acts in connection with the purchase or sale of securities; and (3) its reservoir of rulemaking authority over SROs. Indeed, according to the SEC, these practices “fall within the very heart of the Commission’s regulatory authority over underwriting syndicates.” (SEC Amicus Br. at 1.) 1. The Broad Scope Of The SEC’s Authority Sets The SEC Apart From Other Federal Regulatory Agencies The SEC’s power to regulate all aspects of the national securities markets is integral to the system of capital formation in the United States. The architecture of the securities regulatory regime, and Congress’ sweeping grant of rulemaking and enforcement authority to the SEC, differentiates the Commission from other federal regulatory agencies. Therefore, the Sherman Act Plaintiffs’ reliance on Strobl v. New York Mercantile Exch., 768 F.2d 22 (2d Cir.1985), and similar cases is misplaced. In Strobl, the Second Circuit found that implied immunity was not warranted where the alleged manipulative conduct violated both the Commodities Exchange Act (the “CEA”) and the Sherman Act. 768 F.2d at 31. Strobl, however, presents a very different case than the current action in that “price manipulation is an evil that is always forbidden under every circumstance by both the [CEA] and the antitrust laws ... [and][t]herefore, application of the latter cannot be said to be repugnant to the purposes of the former.” 768 F.2d at 28. As such, no potential conflict could arise between the antitrust laws and the CEA since both have competition as their sole statutory goal. In contrast, the securities laws take into consideration more than just free competition, and in fact permit price manipulation in certain instances despite its effect on competition. See S.Rep. No. 94-75, at 13 (1975), reprinted in 1975 U.S.C.C.A.N. 179, 191 (noting that Commission’s “explicit obligation to balance ... the competitive implications of self-regulatory and Commission action should not be viewed as requiring the Commission to justify that such actions be the least anti-competitive manner of achieving a regulatory objective. Rather, the Commission’s obligation is to weigh competitive impact in reaching regulatory conclusions.”) (emphasis added); Finnegan, 915 F.2d at 825-26 (“It is recognized that competition is the touchstone of the antitrust laws, while in the regulated securities industry the emphasis is on requiring full disclosure without otherwise changing the balance in the market for corporate control. Tension and at times conflict exist between these established public policies.”); see also 15 U.S.C. § 78o-3(b)(9) (national securities association may not impose “any burden on competition not necessary or appropriate in furtherance of the purposes” of the Act). The breadth of the SEC’s authority, in conjunction with its unique mandate to balance competition with other market concerns, increases the likelihood of conflict with antitrust laws, and thus weighs heavily in favor of granting implied immunity where the securities regulatory regime, rather than a relatively narrow statute such as the CEA, is implicated. 2. The SEC’s Power To Regulate Under The Securities Act The Securities Act provides the SEC with plenary authority to regulate the initial public offering of securities. First, the SEC has power to regulate all aspects of the syndicate system. See supra Section IV.A. This includes the power to require the registration of securities, determine the effectiveness of such registration statements, and punish violations. Further, the Securities Act gives the Commission the power to regulate communications among underwriting participants and their customers prior to distribution, including roadshows, the dissemination of prospectuses, the process of book-building and solicitations of “indications of interest.” Finally, Section 28 of the Securities Act permits the SEC “to exempt [by rule or regulation] any person, security, or transaction, or any class or classes of persons, securities or transactions, from any provision or provisions of [the Securities Act.].” 15 U.S.C. § 77z-3; see also 15 U.S.C. § 77r (conferring authority on the Commission to “make, amend, and rescind such rules and regulations as may be necessary to carry out the provisions” of the Securities Act). 3. The SEC’s Power To Regulate Under The Exchange Act The Exchange Act grants the Commission sweeping authority to define and prohibit manipulative practices in connection with securities offerings. See Friedman, 313 F.3d at 802 (the Exchange Act “allows price stabilization practices that the SEC does not prohibit”). For example, Section 9(a) of the Exchange Act outlaws certain forms of manipulative conduct involving exchange-listed securities in the aftermarket, and empowers the Commission to determine whether potentially abusive practices involving those securities should be prohibited, permitted or regulated, including whether certain acts of aftermarket stabilization are permissible: It shall be unlawful for any person, directly or indirectly ... (6) To effect ... any series of transactions ... for the purpose of pegging, fixing or stabilizing the price of such security in contravention of such rules and regulations as the Commission may prescribe as necessary and appropriate in the public interest or for the protection of investors. 15 U.S.C. § 78i(a) (emphasis added); see also 17 C.F.R. § 242.104 (establishing guidelines for stabilization). Whether actions such as the “laddering” or “tie-in” arrangements alleged by the Sherman Act Plaintiffs are permissible aftermarket stabilization practices is not for this Court to determine. It is enough that the Commission is granted the authority to make that determination. See Stock Exchanges Options, 317 F.3d at 149 (“The appropriateness of an implied repeal ... turns on whether the antitrust laws conflict with an overall regulatory scheme that empowers the agency to allow conduct that the antitrust laws would prohibit.”). Similarly, Section 10(b) of the Exchange Act gives the Commission broad rulemak-ing authority to address “manipulative and deceptive devices,” making it unlawful for any person to employ “any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.” 15 U.S.C. § 78j(b) (emphasis added). Section 15(c), dealing with the registration and regulation of broker-dealers like the Underwriter Defendants, prohibits broker-dealers from engaging in any transaction “in connection with which such broker or dealer engages in any fraudulent, deceptive, or manipulative act or practice,” 15 U.S.C. § 78o(c)(2)(A), and gives the Commission the power “by rules and regulations [to] define, and prescribe means reasonably designed to prevent, such acts and practices as are fraudulent, deceptive, or manipulative.” 15 U.S.C. § 78o(c)(2)(D). The Commission’s authority extends to manipulative or deceptive conduct undertaken either unilaterally or in conjunction with other broker-dealers, and it has implemented this arsenal of authority through the adoption of multifarious rules both defining and addressing manipulative and deceptive conduct. By far the clearest manifestation of the Commission’s power to regulate the landscape of allegedly manipulative and deceptive conduct at issue in this case can be found in 17 C.F.R. § 242.100-05, known as “Regulation M.” Regulation M was adopted in 1996 to replace Exchange Act Rules 10b-6, 6A, 7, 8 and 21 (the “trading practice rules”). See SEC Release No. 33-7875, 62 Fed.Reg. 520 (Jan. 3, 1997). Regulation M, like the trading practice rules that preceded it, is “intended to prevent those having a financial interest in a distribution from either manipulating the price of a security or boosting its trading volume and thereby misleading potential investors as to the ‘true’ state of the public market for the security being distributed.” (SEC Amicus Br. at 11.) Specifically, Regulation M prohibits distribution participants — including issuers, selling security holders and underwriters — from bidding for or purchasing, or attempting to induce others to bid for or purchase, the securities being distributed during the restricted period. 17 C.F.R. § 242.101. Importantly, Regulation M exempts certain conduct that would otherwise be prohibited, such as “[t]ransactions among distribution participants in connection with a distribution, ... purchases of securities from an issuer or selling security holder in connection with a distribution” and “[o]ffers to sell or the solicitation of offers to buy the securities being distributed.” 17 C.F.R. §§ 242.10100(8X9). In addition, Regulation M governs aftermarket stabilization, prohibiting it except “for the purpose of preventing or retarding a decline in the market price of a security,” as well as syndicate covering transactions, the imposition of penalty bids and other related activities. 17 C.F.R. § 242.104; see also Papilsky Release, 1980 WL 22136, at *4 (“In connection with some fixed price offerings, the underwriters may elect to ‘stabilize’ the market for the offered security during the distribution.... Stabilization is intended to facilitate an orderly distribution of securities by preventing or retarding a marked decline in the price of the offered security.”); cf. 17 C.F.R. § 240.17a-2 (Exchange Act rule setting forth certain record-keeping requirements related to stabilization, syndicate covering transactions and penalty bids). Included in the Commission’s interpretation of prohibited activity under Regulation M are the very tie-in, laddering and other aftermarket agreements alleged by the Sherman Act Plaintiffs. On August 25, 2000, the SEC’s Division of Market Regulation released Bulletin No. 10, titled “Prohibited Solicitations and ‘Tie-in’ Agreements for Aftermarket Purchases,” in order to “remind[] underwriters, broker-dealers, and any other person who is participating in a distribution of securities ... that they are prohibited from soliciting or requiring their customers to make aftermarket purchases until the distribution is completed.” Bulletin No. 10, Summary. Specifically, Bulletin No. 10 addresses “complaints that, while participating in a distribution of securities, underwriters and broker-dealers have solicited their customers to make additional purchases of the offered security after trading in the security begins,” and that “some underwriters have required their customers to agree to buy additional shares in the aftermarket as a condition to being allocated shares in the distribution (i.e., ‘tie-in’ agreements).” Bulletin No. 10 ¶ 1. Reiterating the Commission’s consistent view of this conduct, Bulletin No. 10 explained: Tie-in agreements are a particularly egregious form of solicited transaction prohibited by Regulation M. As far back as 1961, the Commission addressed reports that certain dealers participating in distributions of new issues had been making allotments to their customers only if such customers agreed to make some comparable purchase in the open market after the issue was initially sold. The Commission said that such agreements may violate the anti-manipulative provisions of the Exchange Act, particularly Rule 10b-6 (which was replaced by Rules 101 and 102 of Regulation M) under the Exchange Act, and may violate other provisions of the federal securities laws. Bulletin No. 10 ¶ 2 (footnotes omitted). Finally, in an analogue to its broad ex-emptive powers under the Securities Act, Section 36 of the Exchange Act grants the SEC general exemptive power pursuant to which “the Commission, by rule, regulation, or order, may conditionally or unconditionally exempt any person, security or transaction, or any class or classes of persons, securities, or transactions, from any provision or provisions of [the Exchange Act] or of any rule or regulation thereunder.” 15 U.S.C. § 78mm. 4. The SEC’s Pervasive Authority Over SROs As noted earlier, the SEC is empowered to regulate or oversee the regulation of the spectrum of broker-dealer conduct through its pervasive regulation of the NASD and other SROs. See supra Section IV.A; see also NASD Manual, Rule 2210: Communications With The Public (setting out standards and filing requirements for members’ communications with the public); NASD Manual, Rule 2711: Research Analysts and Research Reports (rule governing research analyst reports); NASD Manual, Rule 2720: Distribution of Securities of Members and Affiliates — Conflicts of Interest (prohibiting members and associated persons from participating in the distribution of a public offering if there is a conflict of interest with the issuer); NASD Manual, Rule 2750: Transactions With Related Persons (prohibiting the selling or placement of securities by an NASD member engaged in a fixed price offering to certain related persons unless certain conditions are met). 5. The SEC’s Power To Regulate Underwriter Compensation And Commission Practices Finally, the Commission, along with the NASD and other SROs, engages in active regulation of underwriter compensation and commission practices. Gordon, 422 U.S. at 659, 95 S.Ct. 2598 (holding that systems of fixed commission rates, which are under the active supervision of the SEC, are immune from antitrust laws). Apart from its authority over SROs, the Commission itself directly regulates underwriter commissions and compensation. For example, Section 6(e)(1) of the Exchange Act authorizes the Commission to permit a “national securities exchange to impose a reasonable schedule or fix reasonable rates of commissions, allowances, discounts or other fees to be charged by its members for effecting transactions on such exchange.” 15 U.S.C. § 78f. In addition, Exchange Act Rule 10b-10 requires broker-dealers to disclose, inter alia, brokerage commissions in written trade confirmations required to be sent to customers. 17 C.F.R. § 240.10b-10(a)(2)(i)(B). Further, in order to accelerate the effective date of a registration statement, a registrant must notify the Commission whether the NASD has reviewed the proposed underwriting compensation and “issued a statement expressing no objections to the compensation and other arrangements,” and the Commission may deny acceleration if the NASD has not issued such a statement. 17 C.F.R. §§ 230.461(a) & (b)(6). Finally, Regulation S-K, Section 508(3) requires that a registration statement “sets out the nature of the compensation and the amount of discounts and commissions to be paid to the underwriter.” 17 C.F.R. § 229.508(e). For its part, the NASD extensively regulates underwriter compensation and commission practices. For example, the NASD’s corporate financing rule: (1) defines what constitutes underwriter compensation; (2) sets limits on the amount of compensation that underwriters may receive from issuers and their affiliates; and (3) requires submission of proposed underwriting terms and arrangements for every interstate public offering to the NASD for review and approval prior to distribution. NASD Manual, Rule 2710: Corporate Financing Rule — Underwriting Terms and Arrangements. In addition, NASD Rule 2440, and its accompanying interpretation IM-2440, directly address the fairness and disclosure of commissions charged to a broker-dealer’s customers, and provide a non-exclusive list of “relevant factors” that must be considered. In arguing against the application of implied immunity in this case, the Sherman Act Plaintiffs rely on In re Public Offering Fee Antitrust Litig., No. 98 Civ. 7890(LMM), 00 Civ. 7804(LMM), 2003 WL 21496795, at *1 (S.D.N.Y.June 27, 2003) (“Public Offering Fee”), a case dealing with underwriter compensation. In Public Offering Fee, District Judge Lawrence M. McKenna declined to confer implied immunity where the plaintiffs alleged that certain underwriters, including some of the Underwriter Defendants in this action, colluded to fix the underwriting fees charged to issuers at seven percent of the proceeds of IPOs valued between $20 million and $80 million. 2003 WL 21496795, at *1. The court rejected the defendants’ contention that “implied repeal is appropriate ... because plaintiffs’ claims and any adjudication of these claims ... would conflict with the ‘long-standing, active and pervasive regulation’ by the SEC and the NASD of underwriting compensation in public offerings.” Public Offering Fee, 2003 WL 21496795, at *2. Public Offering Fee, however, is distinguishable from this case. First, the Public Offering Fee plaintiffs alleged that the underwriters colluded to fix commissions at a certain percentage, and the court concluded that the defendants “ha[d] not provided any statutory or regulatory authority, legislative history or past regulatory activity that even hint that the SEC or the NASD permit, have permitted or have the authority to permit the fixing of underwriters’ IPO fees.” 2003 WL 21496795, at *2. Thus, the allegations in Public Offering Fee were of a prototypal horizontal price-fixing conspiracy, a narrow issue that is the very evil the Sherman Act was enacted to combat. In contrast, much of the broad-based conduct alleged by the Sherman Act Plaintiffs in this action is permitted under the current securities regulatory regime, see swpra Section IV.A, while the balance of the allegations are within the scope of the SEC’s expansive authority, see supra Sections IV.B.l-4, and outside the heartland of Sherman Act prohibitions. Further, as discussed above, multiple NASD rules define and limit underwriter compensation, and provide a method to determine whether any such compensation is “fair.” See NASD Manual, Rule 2710: Corporate Financing Rule — Underwriting Terms and Arrangements; NASD Manual, Rule 2440: Fair Prices and Commissions; IM-2440: Mark-Up Policy; cf. Friedman, 818 F.3d at 799 (“[Ijmplied immunity analysis requires a fairly fact-specific inquiry into the nature and extent of regulatory action that allegedly conflicts with antitrust law.”). In addition, under the broad exemptive provisions of the Exchange Act, the SEC has the power to permit a national securities association or exchange to fix any commission or fee structure it sees fit, or to permit certain types of discrimination in the imposition of commissions or fees. Consequently, the SEC, and, by extension, the NASD, may permit the conduct related to commission practices alleged in this case. Accordingly, a nascent conflict between the securities regulatory regime and antitrust laws emerges. See Stock Exchanges Options, 317 F.3d at 149; Friedman, 313 F.3d at 801. Finally, the Sherman Act Plaintiffs’ allegations concerning unfair commission practices are properly characterized as manipulative. As a result, implied immunity is warranted because of the Commission’s pervasive authority to regulate, and active regulation of, manipulative and deceptive practices under the Exchange Act and related rules. See supra Section IV. B.3; see also In re Initial Pub. Offering Sec. Litig., 241 F.Supp.2d 281, 383 (S.D.N.Y.2003) (finding a properly-pled 10b-5(b) claim based, inter alia, on a failure to disclose “compensation — in the form of money or commissions” under NASD Rule 2710). The Sherman Act Plaintiffs concede this point. (PI. Opp. at 26 (“The unambiguous language of the statute and regulations makes clear that Defendants-eonspirators allegedly engaged in conduct which violated securities laws on disclosure of underwriter compensation.”).) Therefore, Public Offering Fee does not rescue the Sherman Act Plaintiffs’ claims. C. The SEC’s Consideration Of The Conduct At Issue In Friedman, the Second Circuit pointed to the fact that the SEC had repeatedly acknowledged its awareness of the conduct alleged by the plaintiffs, and exercised its regulatory authority over such conduct even though it had never elected to prohibit it, as well as the fact that the Exchange Act “allows price stabilization practices that the SEC does not prohibit,” in reaching its determination that implied immunity was required. Friedman, 313 F.3d at 802. Similarly, the Second Circuit in Stock Exchanges Options noted that the SEC had vacillated between allowing and prohibiting multiple options listing on a number of occasions. See Stock Exchanges Options, 317 F.3d at 139-142. Plaintiffs, as well as the DOJ and the NYAG, attempt to distinguish this action from Friedman and Stock Exchanges Options on these facts, arguing that no such active regulation, or affirmative decision not to regulate, exists with respect to the panoply of conduct alleged in the Sherman Act Complaint. That argument, however, overlooks the Commission’s well-documented history of considering the very conduct alleged in this action, and its current activity aimed at formulating responses to the alleged “hot issue” abuses of the late 1990s. 1. The SEC’s Prior Consideration Of The Conduct Alleged In The Sherman Act Complaint In 1974, the Commission proposed, but did not adopt, Proposed Rule 10b-20. See Bulletin No. 10 ¶ 2 n. 6. The proposed rale would have prohibited broker-dealers, issuers and other distribution participants from: (1) requiring a prospective or actual purchaser of an offering to purchase any other security being offered or sold by any of the entities; (2) in the case of a registered distribution of securities, requiring a prospective or actual purchaser of an offering to pay any consideration other than that indicated in the applicable prospectus; and (3) requiring any other act, conduct, transaction or promise of any purchaser of any security offered for sale by such entities, with certain limited exceptions. Exchange Act Release No. 10636, 39 Fed. Reg. at 7806-07. As the Commission explained in Bulletin No. 10: Among other things, [Proposed Rule 10b-20] would have explicitly prohibited broker-dealers (and others) from (explicitly or implicitly) demanding from their customers any payment or consideration (including a requirement to purchase other securities) in addition to the announced offering price of the offered security. This would include, for example, conditioning an allocation of shares in a “hot issue” (for which demand exceeds supply) on an agreement to buy shares in another offering or in the aftermarket of another offering, for which there may be a lack of demand. Bulletin No. 10 ¶ 2 n. 6. Proposed Rule 10b-20 was subject to comment for fourteen years. Bulletin No. 10 ¶2 n. 6. In 1988, it was withdrawn because, inter alia, the SEC “concluded that such agreements [as would have been prohibited under the proposed rule] may be reached under the existing anti-fraud and anti-manipulation provisions of the federal securities laws.” Bulletin No. 10 ¶ 2 n. 6. In withdrawing proposed Rule 10b-20, the Commission noted that: The proposed rale would prohibit broker-dealers and others from explicitly or implicitly demanding from their customers any payment or consideration in addition to the announced offering price of any securities. The proposal was intended to prohibit the practice whereby underwriters induced persons to purchase ‘sticky’ issues with the opportunity to purchase more attractive ‘hot’ issues .... In view of the substantial period of time that has elapsed since Rule 10b-20 was proposed and the fact that ‘tie-in’ arrangements may be reached under existing antifraud and anti-manipulation provisions of the federal securities laws, the Commission has determined to withdraw proposed Rule 10b-20. Withdrawal of Proposed Rules Under the Securities Exchange Act of 1934, Exchange Act Release No. 26182, 53 Fed. Reg. 41,206 (Oct. 20, 1988). Thus, for fourteen years the SEC considered, but eventually rejected, imposing bright-line rules concerning “tie-in” arrangements and other improper aftermarket practices alleged in the Sherman Act Complaint, favoring instead a flexible regulatory approach under its general anti-fraud provisions, now embodied in Regulation M. In another example of the Commission’s past consideration of the conduct at issue in this case, the SEC released the “Report Of The Securities And Exchange Commission Concerning The Hot Issues Markets” in August 1984 (the “Hot Issues Report”). In the Hot Issues Report, the SEC recognized that “[generally, the abuses found in a hot issues market involve either artificial restrictions on supply or attempts to stimulate demand that facilitate a rapid rise in the price of the security.” (Hot Issues Report at 29.) The Hot Issues Rep