Better Markets continues to watch for decisions in a number of cases in courts around the world that are important. These include:
Goldman Sachs’ anticipated settlement with DOJ in the Malaysia 1MBD scandal. Recently, the bank entered a settlement with Malaysia, and Better Markets was pleased to see that the settlement included not only substantial fines but also a mandate that Goldman Sachs cover the cost of recovering assets sitting abroad, a term that we have long advocated for. Now we’re keeping an eye out for a settlement between Goldman Sachs and the U.S. Department of Justice. The terms of any deal must seriously punish the bank for its central role in one of the most outrageous cases of corruption and financial fraud in modern history, as we detailed in a report here.
Roderick Ford v. TD Ameritrade. In 2019, Better Markets filed an amicus brief in support of a class-action lawsuit alleging that brokers routinely violate their duty to seek the best execution of client trades because they route orders not to serve their clients’ best interest but instead to maximize incentive payments from exchanges, which are essentially a form of bribery. The case is on appeal to the Eighth Circuit, and the defendants are claiming that class certification is inappropriate because the damages have to be calculated on an individual basis and not class-wide. In our brief, Better Markets argued that because the plaintiffs have developed an algorithm that can efficiently and reliably calculate each investor’s damages resulting from the inferior trade executions, individual trials on that issue are unnecessary and the case can proceed on a class basis. We also highlighted the important policy concerns at stake. Class actions are the only way that the victims of this practice can realistically recover their losses, since the amount of individual investor harm may not warrant the expense of solo lawsuits—even though the cumulative harm is enormous. Moreover, we showed that government enforcement actions are ineffective since they don’t recover significant sums for investors, and they impose small fines that have virtually no deterrent effect given the enormous profits these trading practices generate. The Eighth Circuit recently scheduled oral argument for Sept. 23, and we’ll be listening.