Labaton Sucharow has once again won class certification for investors who alleged that Goldman Sachs made false and misleading statements with respect to its sale of the Abacus, Anderson, Hudson and Timberwolf collateralized debt obligations. The plaintiffs also alleged that Goldman concealed from investors that the SEC was investigating Goldman in connection with the Abacus CDO. Goldman settled with the SEC for $550 million in July 2010.
Judge Paul Crotty of the Southern District of New York originally granted class certification in September 2015, but the Second Circuit reversed the decision earlier this year. On remand, Judge Crotty was asked to consider evidence that was previously neglected, including news media reports on Goldman’s conflict of interest in the sale of these CDOs which did not result in a decline in stock price.
The plaintiffs’ countered that those reports did not include the substance of Goldman’s misrepresentations and “were accompanied by Goldman’s denials, and thus the lack of a significant corresponding stock drop is not surprising.” Judge Crotty sided with the plaintiffs and recertified the class, concluding that “defendants have failed to rebut the basic presumption by a preponderance of evidence.”
The decision is the latest development in the case which was launched in 2010. Labaton Sucharow was appointed co-lead counsel in 2011 and defeated Goldman’s motion to dismiss in 2012. The Firm’s team includes Thomas Dubbs, James Johnson, Michael Rogers and Irina Vasilchenko.