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Goldman Thwarts Fraud Class Action Tied to Abacus CDO: U.S. Appeals Court

(Reuters) A U.S. appeals court said a shareholder lawsuit accusing Goldman Sachs Group Inc of fraudulently claiming to put client interests before its own when creating risky subprime securities before the financial crisis, including a collateralized debt obligation known as Abacus, cannot proceed as a class action.The 2nd U.S. Circuit Court of Appeals in Manhattan said on Friday a lower court judge imposed too high a burden on the Wall Street bank to show that its alleged conflicts of interest and misleading statements had no impact on its stock price. While the 3-0 decision permits shareholders to again seek class certification, it may now be easier for Goldman to convince U.S. District Judge Paul Crotty, who had certified a class action in September 2015, not to let the plaintiffs sue as a group.

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