Securities Fraud-Goldman Sachs-Class Certification and Statutes of Limitations

In a recent Seventh Circuit opinion, the Court, affirmed a rule 68 Offer of Judgment entered against Goldman by Premium Plus Partners.  Goldman obtained information about the suspension on the sale of 30 year T-bonds from Youngdahl who acquired the information from Doug an attendee at the Treasury Department’s meeting.  The Department of Treasury had placed embargo on the information, until an announcement was made the next day at 10 a.m.

In the interim, Goldman Sachs purchased some 30 year T-bills and made a substantial profit from the advance actions that it was able to take.  After the SEC initiated a Fraud Complaint, Premium Plus Partners and a variety of other sellers and short positions sued Goldman Sachs for fraud.  Goldman Sachs offered Premium Plus Partners a rule 68 offer of judgment for the amount it wanted plus interest.

The Seventh Circuit affirmed the entry of the rule 68 offer of Judgment on behalf of Premium Plus Partners and the denial of Premium Plus Partners request to continue to prosecute the matters on behalf of others.  In doing so, the Seventh Circuit, reaffirmed that a litigant may not continue to prosecute a matter on behalf of others after accepting an offer of judgment.  Moreover, it held that Tomlison a class litigant could not continue to prosecute the matter, because of the two year statute of limitation for fraud claims.

Understanding the nuances of fraud claims under the Commodity Exchange Act, the Securities Exchange Acts, and the abuses an investor can acquire from advance information with market power from large positions in a holding.  If you have any concerns or questions about prosecuting or defending fraud claims based on the trading of commodities or securities, then please do not hesitate in contacting us.

For more details see:  Premium Plus Partners v. Goldman Sachs

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