Goldman Sachs, Morgan Stanley Class Action Lawsuit Overview:
- Who: Alma Felix filed a class action lawsuit against Goldman Sachs Group Inc. and Morgan Stanley.
- Why: The global financial services institutions allegedly avoided billions of dollars in losses by selling a large number of shares based on confidential, market-moving information.
- Where: The insider trading class action lawsuit was filed in New York federal court.
Goldman Sachs Group Inc. and Morgan Stanley collectively avoided billions of dollars in losses by selling shares of online discount retailer IQIYI Inc. while in possession of confidential, market-moving information, a new class action lawsuit claims.
Plaintiff Alma Felix alleges the global financial services institutions Goldman Sachs and Morgan Stanley confidentially learned that Archegos Capital Management, which had $10 billion under management, would be required to fully liquidate its position in IQIYI. Both institutions were prime brokers of Archegos.
During the week of Mar. 22, Goldman Sachs and Morgan Stanley reportedly sold a large number of IQIYI shares before the Archegos story was made public, “sending IQIYI’s stock into a complete tailspin,” the lawsuit alleges. “As a result of these sales, Defendants avoided billions in losses combined.”
Class Action Claims Goldman Sachs and Morgan Stanley Knew They Were Prohibited from Making These Trades
Goldman Sachs and Morgan Stanley knew that they were prohibited from making trades based on the confidential information they had learned about Archegos but made the trades anyway, according to the insider trading class action lawsuit.
As a result of these alleged violations of U.S. securities laws, investors who purchased or otherwise acquired IQIYI shares during this period suffered financial losses.
Felix is asking the court to require the defendants to pay class members the damages they sustained due to the defendants’ illegal transactions.
Felix filed the class action lawsuit on behalf of a class of investors who purchased or otherwise acquired IQIYI shares contemporaneously with the defendants’ allegedly unlawful trades from Mar. 22-29.
Do you think Goldman Sachs and Morgan Stanley improperly used confidential information to avoid significant losses? Tell us your thoughts in the comments section below!
Felix is represented by Thomas L. Laughlin IV, Rhiana L. Swartz and Jonathan M. Zimmerman of Scott+Scott Attorneys at Law LLP; David W. Hall, Armen Zohrabian and Arun Ravindran of Hedin Hall LLP; and Brian J. Schall of The Schall Law Firm.
The Goldman Sachs Class Action Lawsuit is Alma Felix v. Goldman Sachs Group Inc., et al., Case No. 1:21-cv-10286, in the U.S. District Court for the Southern District of New York.
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One thought on Insider Trading Class Action: Goldman Sachs, Morgan Stanley Avoided Billions in Losses
Theres been a trend with both Goldman and Morgan Stanley involved in lots of pharma stocks. These stocks tank 70-90%+ on news. When it tanks, both of them will post their new PT and its usually lower than the price it tanked it. Im positive they get insider information or something behind the scenes is happening. They need to be investigated.