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June 21, 2021

Today’s Supreme Court Decision Risks Letting Goldman Sachs and Other Corporations Lie to Investors with Impunity

Monday, June 21, 2021
Contact: Doug Walker at 202-618-6430 or

Washington, D.C.  –  Stephen Hall, Legal Director and Securities Specialist for Better Markets, issued the following statement on the Supreme Court’s decision in Goldman Sachs Group, Inc. v. Arkansas Teacher Retirement System, issued this morning:

“What’s at stake in the case decided by the Supreme Court today is whether Goldman Sachs and other corporations can lie to investors and get away with it.  In this case, Goldman Sachs affirmatively stated to investors that it had ‘extensive procedures and controls in place’ to manage conflicts of interest and reassured investors that their clients ‘always come first.’  Those statements were false and misleading as clearly revealed by Goldman’s egregious actions perpetrating one of the most shameless frauds in the history of the 2008 financial crisis. 

“If Goldman had them at all, those professed ‘extensive procedures and controls’ failed miserably and repeatedly, almost as if by design, suggesting they were little more than window dressing.  Moreover, as proven by the Congressional testimony of Goldman’s CEO, Goldman’s interests actually ‘come first,’ with clients’ interests a distant second.  That’s why Goldman’s shareholders sued to recover damages due to these false and misleading statements. 

“Today the Court decided two issues.  First, it confirmed that the generic nature of misrepresentation is something a trial court should consider as it decides whether a misrepresentation about a company could have affected the market price of the company’s stock.  Second, it correctly held that the burden of persuasion falls on the defendant (Goldman in this case) when it comes to price impact—it is their duty to show, by a preponderance of the evidence if possible, that the misrepresentations did not have a price impact.  However, the Court also decided to send the case back to the Second Circuit, since it wasn’t convinced the lower court took the supposedly generic nature of Goldman’s misrepresentations properly into account when it allowed the case to go forward.

“As we argued in our Amicus brief, given Goldman’s history of mishandling its conflicts of interest even prior to the financial crisis, the market would certainly have been influenced and comforted by Goldman’s false assurances that it carefully controlled such conflicts.  After all, that presumably was Goldman’s intent in making the statement to investors in the first place.  Thus, the issue of price impact should be resolved in the shareholders’ favor.  The Second Circuit now has a chance to put this issue to rest and give the shareholders their day in court, where we will again argue for that outcome. If the Second Circuit gets it wrong, then Goldman gets a free pass for its fraud.”  


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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