Chicago Business Litigation Lawyer Blog
While most securities fraud lawsuits accuse the defendant of manipulating their stock prices to keep them artificially high, the current lawsuit against Goldman Sachs alleges the company lied to maintain its high stock prices, rather than lying to cause the prices to rise. It’s a unique allegation, and one the U.S. Supreme Court has not yet recognized, but two lower courts have already upheld it as a valid claim.
Goldman appealed the decision made by the district court and the Second U.S. Circuit Court of Appeals to the Supreme Court. The company alleges that, if the Supreme Court were to allow the securities lawsuit against it to proceed, the result would be devastating for public companies all over the country.
Goldman is arguing that the allegations against it are too weak to be valid. The allegations made by the shareholders rely on Goldman’s advertising claims that included words like “honesty” and “integrity” and claimed the company always prioritized the interests of its clients, when the opposite turned out to be true.
According to Goldman, the statements cited by the lawsuit are too vague to make the basis of a securities-fraud case. The company has also denied the statements had any effect on its stock price. If the lawsuit is allowed to proceed through the courts, the bank alleges it will allow shareholders to file securities-fraud lawsuits in the future simply by pointing to any kind of aspirational statement that nearly all companies make in their marketing materials. Continue reading ›