In the latest case against the Goldman Sachs Group, Paul Crotty, District Judge, Manhattan ruled that the group has to face legal proceedings as a group of shareholders is all set to sue the company on account of financial losses of $13 billion. According to the shareholders, the group deliberately hid its conflict of interest while creating securities of subprime nature just before the 2008 financial crisis. 

According to the specific details, shareholders have accused the group of deliberately concealing the facts related to the collateralized debt obligations so as to specifically benefit the hedge funds. Once this truth was revealed, the stock prices of Goldman Sachs fell sharply, thereby bringing a lot of financial loss to the shareholders. 

There is no official comment from Goldman and the lawyer representing the case of the shareholders, Darren Robbins says that they are ready to take the case further which has been in limbo for 11 years now. The case had been in the Supreme court of the country which, in its observation in June earlier this year, said that lower courts could use their common sense and expert testimony to finally decide whether the stock prices had been affected by this move of the group or not. 

Crotty dismissed Goldman’s claims that its statements about its business interest including the ones in which the group claims that the client interest always come first and honesty and integrity at the heart of their business are very generic statements and cannot mislead the investors or affect the stock prices of the company. The judge noted that generic statements from the group could even lead to reinforcing misconceptions among investors, and there is no evidence offered by Goldman that its stock prices would have remained intact had it disclosed its conflicts of interest to shareholders.

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