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Goldman Sachs Securities Class Action Plaintiffs Drop Long-Running Case Following Class Decertification

Paul, Weiss secured a final win for Goldman Sachs in a long-running, $13 billion securities class action when the plaintiffs declined a last chance to appeal Goldman’s resounding appellate win decertifying the class on November 8 and voluntarily dismissed their case on November 16, bringing a decade of hard-fought litigation to a close.

In the underlying lawsuit, three pension funds claimed that Goldman Sachs violated securities laws by making a series of false and misleading statements about its business principles and management of conflicts of interest, and by so doing, artificially maintained an elevated Goldman share price, which allegedly cost them $13 billion in losses.

The district court originally certified a class in 2015, and Goldman subsequently fought to overturn that certification. The Second Circuit in Goldman’s first appeal vacated certification and remanded the case; the district court once again certified the class. After a second interlocutory appeal by Goldman was unsuccessful, Paul, Weiss was retained to handle the Supreme Court appeal. In an enormously important decision in 2021 vacating the Second Circuit’s affirmance, the Supreme Court directed the lower courts to consider the level of "mismatch" in content and "genericness" between the alleged false and misleading statements and the purported corrective disclosures when determining whether the statements could have impacted Goldman’s share price. On remand, the district court once again granted class certification to the investor plaintiffs—for a third time.

Paul, Weiss again won decertification of the class in a unanimous ruling by the Second Circuit on August 10. The panel found that the district court had erred in its decision to certify an investor class by misinterpreting the Supreme Court’s 2021 ruling. The plaintiffs had until November 8 to keep the litigation alive by petitioning the Supreme Court to review their case, but ultimately declined to do so.

The Paul, Weiss team included litigation partners Kannon Shanmugam, who argued the appeal, and Audra Soloway.

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