Fred Klonsky: Supreme Court Rules That Arkansas Teacher Pension Were Suckers To Trust Goldman Sachs
While SCOTUS was handling some big headline decisions in this session, Fred Klonsky picked up on a quieter decision that certainly fuels more cynicism about protections for regular folks.
Today the United States Supreme Court ruled that just because Goldman Sachs claimed integrity, honesty and concern for client interests was no reason that the Arkansas Teachers Retirement System should have believed it.
Goldman Sachs argued before that Court that their claims of integrity were “aspirational” and should not have been used to base investment decisions by the Arkansas Retired Teachers Association.
It was a mission statement and the Court ruled those are basically bullshit.
Frankly, I’ve always thought that. Now, I guess it’s official.
The justices on Monday set aside a federal appeals court ruling that had let the suit go forward as a class action, saying it wasn’t clear the lower court adequately considered Goldman’s contention that its disputed statements were too generic to support the suit. The high court sent the case back to the New York-based 2nd U.S. Circuit Court of Appeals to revisit the issue.
Goldman Sachs investors, led by the Arkansas Teacher Retirement System, say they were deceived by Goldman Sachs’s repeated public assurances that it was being vigilant about avoiding conflicts of interests. The shareholders say those assurances proved false when the Securities and Exchange Commission sued the company in April 2010 over a portfolio known as Abacus.
Arkansas retired teachers said that when they bought Goldman shares they relied upon the bank’s statements about its ethical principles and internal controls against conflicts of interest, and its pledge that its “clients’ interests always come first.”
Goldman argued that the statements were aspirational and not meant to be taken seriously when applied to actual business practices.
Justice Amy Coney Barrett authored the Courts judgement supporting Goldman Sachs.