US Supreme Court sends shareholder class action against Goldman Sachs back to lower court
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US Supreme Court sends shareholder class action against Goldman Sachs back to lower court

The US Supreme Court on Monday vacated and remanded a shareholder class action suit against Goldman Sachs, sending the case back to the lower court to determine whether alleged misstatements by Goldman Sachs were too general to have affected its stock price.

The suit, filed in 2011, alleged that Goldman Sachs artificially inflated its share price prior to, throughout, and following the 2007-2009 financial crisis.

In an opinion written by Justice Amy Coney Barrett, the court held that “the Second Circuit correctly placed the burden of proving a lack of price impact on Goldman.” However, defendants in securities cases have the ability to rebut the notion that class-based adjudication is appropriate by showing that the alleged misstatements that were made were so generic that they would not have distorted the price of the security in question. Thus, the court also held that, “because it is unclear whether the Second Circuit properly considered the generic nature of Goldman’s alleged misrepresentations in reviewing the District Court’s price impact determination, we vacate the judgment of the Second Circuit and remand the case for further proceedings consistent with this opinion.”

Justice Neil Gorsuch filed an opinion concurring in part and dissenting in part, in which Justices Clarence Thomas and Samuel Alito joined. Justice Sonia Sotomayor filed an opinion concurring in part and dissenting from the judgment.