BPI, Joint Trades File Amici Brief in Goldman Shareholder Class Action Case Before SCOTUS

BPI, along with the Securities Industry and Financial Markets Association and other financial and business trades, filed an amici curiae brief in support of Goldman Sachs Group Inc. in a case before the Supreme Court relating to the ability of shareholders to bring securities fraud class-action lawsuits against public companies whose stock prices fall. The case is Goldman Sachs Group Inc. et al. v. Arkansas Teacher Retirement System et al.  
At issue is whether shareholders can file class-action lawsuits when a company makes a general, public statement, such as saying “clients’ interests come first” in an annual report, and then its share price falls. Pension funds argued that Goldman misled the markets and inflated its stock price by making that kind of generic statement ahead of government enforcement actions against the bank related to collateralized debt obligation trades. BPI and the other trades argue in the brief that upholding the Second U.S. Circuit Court of Appeals decision to allow a class action without an opportunity to show that the statements did not actually affect the stock price when made could expose companies to baseless lawsuits premised on generic company statements that didn’t actually affect the market. 
The SEC and Department of Justice also filed an amici brief  supporting the argument that the generic nature of the bank’s allegedly misleading statements be taken into account when considering whether the statements affected its stock price and whether the court presumes the shareholders all relied on the same alleged misrepresentations when they bought shares.  
The case is scheduled for oral argument at the Supreme Court on March 29.