Overstock.com loses case against Goldman
11 January 2012 San Francisco
Image: Shutterstock
Overstock's lawsuit against Goldman Sachs and Merrill Lynch was dismissed by a judge because the company could not prove the investment firms violated naked short sale rules in California.
"Obviously, we are disappointed with the court's ruling, which was not on the merits of the claims, but on a narrow interpretation of California law having to do with whether this conduct took place in California," said Jonathan Johnson, president of Overstock.com.
The clearing operations for the two investment banks, which were accused by Overstock of intentionally failing to locate and deliver borrowed shares for clients, are based in New York. Lawyers for Goldman also denied any market manipulation, Bloomberg reported.
Five years ago Overstock.com filed the case against eleven Wall Street firms alleging manipulation of its stock through illegal naked short selling schemes and later narrowed the focus of the case to the remaining defendants, entities of Goldman Sachs and Merrill Lynch.
In pursuing its case in California, the online retailer presented cases of manipulative trades which took place in San Francisco, such as those effected by the defendants on the Pacific Coast Stock Exchange, among other allegations.
Speaking on the ruling, Patrick Byrne, CEO and chairman of Overstock.com, said, "This is a setback, but we have always said we are in this case for the long haul. Until at least twelve Americans have had a chance to issue their own ruling on these facts, we will carry on."
"Obviously, we are disappointed with the court's ruling, which was not on the merits of the claims, but on a narrow interpretation of California law having to do with whether this conduct took place in California," said Jonathan Johnson, president of Overstock.com.
The clearing operations for the two investment banks, which were accused by Overstock of intentionally failing to locate and deliver borrowed shares for clients, are based in New York. Lawyers for Goldman also denied any market manipulation, Bloomberg reported.
Five years ago Overstock.com filed the case against eleven Wall Street firms alleging manipulation of its stock through illegal naked short selling schemes and later narrowed the focus of the case to the remaining defendants, entities of Goldman Sachs and Merrill Lynch.
In pursuing its case in California, the online retailer presented cases of manipulative trades which took place in San Francisco, such as those effected by the defendants on the Pacific Coast Stock Exchange, among other allegations.
Speaking on the ruling, Patrick Byrne, CEO and chairman of Overstock.com, said, "This is a setback, but we have always said we are in this case for the long haul. Until at least twelve Americans have had a chance to issue their own ruling on these facts, we will carry on."
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