By: Daily Record Staff//September 20, 2023
By: Daily Record Staff//September 20, 2023//
United States Court of Appeals for the Second Circuit
Securities fraud – Presumptions
Arkansas Teachers Retirement System V. Goldman Sachs Group Inc.
Judges Wesley, Chin, and Sullivan
Background: The shareholders of the defendant commenced a class action claiming securities fraud in violation of the Securities Exchange Act by the misrepresentation of the defendant’s ability to manage conflicts of interest in its business practices. At issue on appeal is class certification.
Ruling: The Second Circuit reversed and decertified the class. The court held that it was in error to find that the defendant failed to rebut the Basic Inc. v. Levinson, 485 U.S. 224 (1988), presumption by a preponderance of the evidence. Thus, it was an abuse of discretion to certify the shareholder class.
Robert J. Giuffra Jr., of Sullivan & Cromwell, and Kannon K. Shanmugam, of Paul, Weiss, Rifkind, Wharton & Garrison, for the defendants-appellants; Thomas C. Goldstein, of Goldstein & Russell, for the plaintiffs-appellees.