Supreme Court gives Goldman chance to end shareholder suit

Supreme Court gives Goldman chance to end shareholder suit
The justices set aside a federal appeals court ruling in a lawsuit that accuses the company of misleading shareholders by masking conflicts of interest related to mortgage-backed securities it sold. Goldman argued the case made it too easy for shareholders to press class-action fraud suits.
JUN 21, 2021
By  Bloomberg

The Supreme Court gave Goldman Sachs Group Inc. a new chance to stop a lawsuit that accuses the company of misleading shareholders by masking conflicts of interest in mortgage-backed securities it sold.

The justices set aside a federal appeals court ruling that had let the suit go forward. Goldman and its business allies argued the ruling made it too easy for shareholders to press class-action fraud lawsuits. The Supreme Court decision sends the case back to the appeals court level for a new look.

The investors, led by the Arkansas Teacher Retirement System, say they were deceived by Goldman Sachs’s repeated public assurances that it was being vigilant about avoiding conflicts of interests. The shareholders say those assurances proved false when the Securities and Exchange Commission sued the company in April 2010 over a portfolio known as Abacus.

Writing for the Supreme Court, Justice Amy Coney Barrett said it wasn’t clear whether the New York-based appeals court “properly considered the generic nature of Goldman’s alleged misrepresentations.”

The case was the first High Court clash over shareholder lawsuits since former President Donald Trump appointed three justices and created a 6-3 conservative majority.

“We are pleased the Supreme Court has vacated the grant of class certification and we will continue to vigorously defend ourselves as the case returns to the lower courts,” Maeve DuVally, a spokeswoman for Goldman Sachs, said in an emailed statement.

Goldman’s stock jumped 2.4% at 10:26 a.m. in New York. That was in line with the rebound across the sector on Monday after shares of the major banks had slumped last week.

Latest News

Hybrid RIA Wealth Consulting Group appoints Talley Léger as chief market strategist
Hybrid RIA Wealth Consulting Group appoints Talley Léger as chief market strategist

The 25-year veteran of the industry brings his experience from Raymond James, Invesco and Barclays to the Las Vegas, Nevada-based firm.

Bank of America taps BNY Wealth leader for Pittsburgh expansion
Bank of America taps BNY Wealth leader for Pittsburgh expansion

The financial industry veteran, supported by a team of wealth advisors, will drive the firm's private banking expansion in Pennsylvania

Helping advisors tackle margin compression
Helping advisors tackle margin compression

Advisor fees have remained relatively steady despite free compression across the industry. However, clients now expect more bang for their buck, says AssetMark's Matthew Matrisian

Prioritizing the human condition
Prioritizing the human condition

The good, the bad, and the ugly: How CEO connects the numbers to a client's life story.

Snowden Lane embraces move toward all-in-one platforms
Snowden Lane embraces move toward all-in-one platforms

Dig deeper into latest technology trends with our expert speakers at the upcoming RIA Activate event.

SPONSORED Destiny Wealth Partners: RIA Team of the Year shares keys to success

Discover the award-winning strategies behind Destiny Wealth Partners' client-centric approach.

SPONSORED Explore four opportunities to elevate advisor-client relationships

Morningstar’s Joe Agostinelli highlights strategies for advisors to deepen client engagement and drive success