On December 8, 2020, Judge Paul A. Crotty of the United States District Court for the Southern District of New York certified a class of investors—for the third time—in the high-profile prosecution of Goldman Sachs stemming from the 2008 financial crisis. The case, which is one of the longest-running civil securities fraud prosecutions, is co-led by Labaton Sucharow and Robbins Geller Rudman & Dowd.
The suit alleges that Goldman made a series of false and misleading statements and omissions while packaging four collateralized debt obligations (CDOs)—including the infamous Abacus CDO—concealing its unmanaged conflicts of interest and other violations of its stated corporate governance practices.
In the 11-year saga, the Firm has overcome multiple appeals from Defendant's counsel, securing class certification in 2015 and again in 2018 and achieving a favorable decision from the Supreme Court denying Goldman’s assertion that their statements about conflicts and integrity were too “generic” and did not have price impact. In a nod to the Supreme Court's instructions on the case, Judge Crotty said in his December 8 ruling that the alleged misstatements were "not so generic as to diminish their power to maintain" artificial price inflation and that some statements "are more generic than others."