Goldman, Morgan Stanley must face investors' lawsuit over Archegos collapse
© Reuters. FILE PHOTO: A view of the Morgan Stanley London headquarters at Canary Wharf financial centre in London, Britain June 24, 2016. REUTERS/Russell Boyce/File Photoand other banks that underwrote two stock offerings for the media company, upholding a ruling that banks fear could upend capital markets.
Goldman and Morgan Stanley, which were two of Archegos' prime brokers, said banks already followed a slew of procedures to avert conflicts of interest, protect client confidences and prevent insider trading. The court also said the banks wouldn't have to reveal confidential information about clients, and could have simply disclosed their intent to sell ViacomCBS shares without mentioning Archegos.
In the federal ruling, U.S. District Judge Jed Rakoff said investors in Archegos' stocks did not adequately allege that Goldman and Morgan Stanley conducted insider trading, or breached any fiduciary duty to the individual companies.
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