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Goldman Sachs Morgan Stanley Unlawful Trades Class Action Lawsuit Overview:
- Who: Kai Chen filed a class action lawsuit against Goldman Sachs Group Inc. and Morgan Stanley.
- Why: Chen claims Goldman Sachs and Morgan Stanley sold investors Tencent Music Entertainment Group stock it knew was about to drop in price.
- Where: The class action lawsuit was filed in New York federal court.
Goldman Sachs and Morgan Stanley sold unsuspecting investors Tencent Music Entertainment Group securities it knew were likely to suffer significant losses, a new class action lawsuit alleges.
Lead plaintiff Kai Chen claims the investment banking companies were privately aware that Archegos Capital Management, a major Tencent investor with $10 billion under management, had either failed or were likely to fail to meet a margin call, forcing it to liquidate its position in the company.
Goldman Sachs and Morgan Stanley sold a high number of Tencent Music stock shares during this same time while also unloading large block trades consisting of Archegos “doomed bets” and billions of dollars worth of Tencent securities, alleges the class action lawsuit.
The plaintiff claims that, once news about Archegos financial affairs hit the public, Tencent Music stock prices went into a “tailspin,” significantly injuring investors while Morgan Stanley and Goldman Sachs had saved themselves billions of dollars combined.
“Defendants knew, or were reckless in not knowing, that they were prohibited from trading based on this confidential market-moving information, but traded anyway, disposing to Plaintiff and other members of the Class their Tencent stock before the news about Archegos was announced and Tencent’s shares plummeted,” states the class action lawsuit.
Tencent Music Stock Trades ‘Unlawful,’ Claims Investor Class Action
Chen claims Goldman Sachs and Morgan Stanley committed multiple violations of the Securities Exchange Act of 1934. He is demanding a jury trial and requesting damages, along with interest, for himself and all Class Members.
Chen wants to represent a nationwide Class of investors who purchased or otherwise acquired Tencent shares during the same time Goldman Sachs and Morgan Stanley were making “unlawful” trades between March 22, 2021 and March 29, 2021.
A separate class action lawsuit was filed against Goldman Sachs in August by a consumer alleging the company worked with Dell to shortchange investors out of billions of dollars.
Meta Platforms, Inc.—formerly known as Facebook—is also facing a class action lawsuit claiming it injured investors by concealing its dependence on “toxic content and inauthentic accounts to drive revenues.”
Were you injured financially after Tencent Music stock dropped in price? Let us know in the comments!
The plaintiff is represented by Jeremy A. Lieberman, J. Alexander Hood II, and James M. LoPiano of Pomerantz LLP, and Peretz Bronstein of Bronstein, Gewirtz & Grossman, LLC.
The Goldman Sachs, Morgan Stanley Tencent Music Stock Class Action Lawsuit is Chen v. Goldman Sachs Group Inc., et al., Case No. 1:21-cv-09564, in the U.S. District Court for the Southern District of New York.
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