Goldman Sachs Dodges Short-Swing Suit In 2nd Circ.

Law360, New York (January 29, 2014, 12:58 PM EST) -- The Second Circuit affirmed Wednesday that Goldman Sachs Group Inc. won't have to disgorge nearly $2 million in short-swing trade profits of Leap Wireless International Inc. derivatives, finding Goldman wasn't a statutory Leap insider when it purchased the options in question.

The appellate court upheld a New York district court's 2012 decision that Goldman's liability under the U.S. Security and Exchange Commission's so-called short-swing rule didn't apply because the company no longer had a 10 percent ownership stake — the threshold for insider scrutiny under the...
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