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On December 11, 2020, in the first securities class action case to reach the United States Supreme Court in years, the Court agreed to review a decision by the Second Circuit Court of Appeals that refused to allow defendants to rebut the presumption of classwide reliance by pointing to the generic nature of alleged misstatements to show that the statements had no price impact and granted class certification (
Goldman Sachs Group Inc. v. Arkansas Teacher Retirement System (
Arkansas Teachers), No. 20-222 (petition for
certiorari granted)). Class certification is an important battleground in defending securities class actions because the potential exposure creates an
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On Friday night, December 11, 2020, tucked below its order denying Texas’s bid to overturn the results of the Presidential election, the U.S. Supreme Court agreed to review what petitioners Goldman Sachs Group, Inc. and its former top executives (“Goldman”) billed as “the most important securities case to come before the Court since Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S. 258 (2014) (Halliburton II).” That the Supreme Court granted Goldman’s petition in Goldman Sachs Group Inc. v. Arkansas Teacher Retirement System without a well-developed circuit split suggests that some members of the Court are troubled by the pro-plaintiff, lower-court decisions in this case and how class certification issues are handled in securities actions.
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Rebutting the Presumption of Class-Wide Reliance at the Class Certification Stage: Analysis of and Key Takeaways From Arkansas Teacher Ret. Sys. V. Goldman Sachs Grp., Inc. and the Supreme Court’s Recent Grant of Certiorari Thursday, December 17, 2020
Since the Supreme Court’s decision in
Basic Inc. v. Levinson, 485 U.S. 224 (1988), plaintiffs have been permitted to invoke a rebuttable presumption of class-wide reliance at the class certification stage in securities fraud cases, thereby skirting any obligation to establish individualized reliance for each member of the proposed class. In
Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S. 258 (2014)
, the Supreme Court clarified that defendants must be afforded an opportunity to rebut this presumption, and cautioned judges not to “artificially limit” the types of rebuttal evidence a defendant may offer, even if such evidence “is also highly relevant at the merits stage.”
Supreme Court to Hear Goldman Securities Suit and Revisit Critical Class Certification Issues
USA
December 14 2020
On Friday night, December 11, 2020, tucked below its order denying Texas s bid to overturn the results of the Presidential election, the U.S. Supreme Court agreed to review what petitioners Goldman Sachs Group, Inc. and its former top executives ( Goldman ) billed as the most important securities case to come before the Court since Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S. 258 (2014) (Halliburton II). That the Supreme Court granted Goldman s petition in Goldman Sachs Group Inc. v. Arkansas Teacher Retirement System without a well-developed circuit split suggests that some members of the Court are troubled by the pro-plaintiff, lower-court decisions in this case and how class certification issues are handled in securities actions.
Supreme Court to Hear Goldman Sachs Fraud Case Appeal
The Supreme Court has agreed to consider making it tougher for shareholders to bring class-action lawsuits in securities fraud cases.
The decision to hear the case, Goldman Sachs Group Inc. v. Arkansas Teacher Retirement System, came Dec. 11 on appeal from the 2nd Circuit Court of Appeals. The respondents are the Arkansas Teacher Retirement System, West Virginia Investment Management Board, and the Plumbers and Pipefitters National Pension Fund.
The court provided no rationale for its decision, which is its custom.
Goldman Sachs has been accused of concealing conflicts of interest in mortgage-backed securities it sold. The firm claims the appeals court made it unduly easy for aggrieved investors to unite in a single lawsuit.