On March 3, 2021, Lieff Cabraser and Schnapper-Casteras PLLC filed an amicus brief in the Second Circuit Court of Appeals on behalf of two former U.S. Securities and Exchange Commission Chairs, four former SEC Commissioners, and numerous other former SEC officials, all voicing support of a class of investors fighting to remain certified in a long-running securities class action against Goldman Sachs, Goldman Sachs v. ATRS. The investors sued Goldman over misleading corporate statements, and the banking giant is now trying to prevent them from being bringing the case forward as a group.
As reported by Law360 (subscription), the case against Goldman Sachs hinges on the so-called “inflation-maintenance theory” — the idea that misstatements can fraudulently keep an artificially boosted stock price from dropping. The New York Times reported on the brief, noting that the amici warn a victory for Goldman Sachs in the case would damage the integrity of the market: “Companies and corporate executives [could] have considerable incentives to maintain a falsehood that is propping up a stock price.”
The brief was filed on behalf of former SEC Chairs William Donaldson and Arthur Levitt, as well as former Commissioners Robert Jackson, Kara Stein, Luis Aguilar, and Bevis Longstreth, along with a number of staff. Former Commissioner Jackson told the Times that “Private cases play a crucial police function,” arguing that the court should let investors sue as a group.