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March 26, 2021

Supreme Court to Hear Oral Argument as Goldman Sachs’ Shareholders Seek to Hold Bank Accountable for Epic Crisis-Era Fraud


Friday, March 26, 2021

Contact: Pamela Russell at 202-618-6433 or

Washington, D.C.  –  Stephen Hall, Legal Director and Securities Specialist for Better Markets, issued the following statement on the eve of oral argument in Goldman Sachs Group, Inc. v. Arkansas Teacher Retirement System, set for Monday morning, March 29, before the Supreme Court:

“What’s at stake in this case is whether a group of Goldman Sachs’ shareholders will be able to join together in a class action and press their case against the bank for one of the most shameless frauds in the history of the 2008 financial crisis.

“In the years before the crisis exploded and began dismantling our economy, Goldman Sachs organized, promoted, and sold mortgage-backed securities that were designed to fail. Goldman had become convinced that the residential mortgage market was headed for collapse, and it saw a rich profit opportunity. So, it bet against the investments even as it foisted them onto countless unsuspecting investors who were persuaded to take the “long side” of the deal. The bank thus had a huge and undisclosed conflict of interest. And in addition to misleading investors, Goldman misled the public—including its own shareholders—by falsely proclaiming that it had “extensive procedures and controls in place” to manage such conflicts of interest and by reassuring everyone that clients “always come first.” When the truth came out, the bank’s stock price fell, and shareholders suffered losses.

“Many of those shareholders, including pension funds, have been struggling for years in the courts to hold the bank accountable for its misrepresentations. The threshold issue now is whether the case can be brought as a class action. And to beat back the shareholder claims, Goldman is advancing the strained argument that its deceptive assurances, which concealed profound conflicts of interest, were too general to have any impact on the bank’s stock price by artificially propping it up. In our amicus brief, we supported the shareholders, detailing Goldman’s history of mishandling its conflicts of interest and showing why it was clearly important for Goldman’s shareholders to have truthful disclosures about the way the bank managed—or mismanaged—its conflicts.

“The case raises technical legal issues surrounding class actions, but the bottom line is that if the Supreme Court rules against the shareholders, they won’t be certified as a class under the rules and won’t even be allowed to present their case on the merits to the trial court.

“As in most Supreme Court cases, the implications are even broader. The Court’s ruling will either raise new hurdles for future plaintiffs seeking recovery for large scale securities frauds in court, or, we hope, help clear the path for those seeking such relief. As the Supreme Court itself has repeatedly recognized over the years, private actions to enforce the antifraud provisions in the securities laws are an essential supplement to government actions. The Court now has a fresh opportunity to affirm this important principle or instead undermine the integrity of our securities markets by making it easier for bad actors to defraud investors and shareholders with impunity.”


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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