Bloomberg

June 21, 2021: The U.S. 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 on Monday set aside a federal appeals court ruling that had let the suit go forward as a class action, saying it wasn’t clear the lower court adequately considered Goldman’s contention that its disputed statements were too generic to support the suit. The high court sent the case back to the New York-based 2nd U.S. Circuit Court of Appeals to revisit the issue.

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.

The case was the first high court clash over shareholder lawsuits since former President Donald Trump appointed three justices. Goldman and its business allies argued that the appeals court ruling made it too easy for shareholders to press class action fraud suits.

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