Adam Brown | Bloomberg LawEBC I, Inc. v. Goldman Sachs & Co., No. 5448, 2011 NY Slip Op 08839, 2011 BL 309162 (App. Div. Dec. 8, 2011) The Appellate Division of the Supreme Court of New York, First Department, affirmed a lower court ruling dismissing fraud and breach of fiduciary duty claims against Goldman Sachs & Co. in connection with the bank's role in underwriting the $178 million initial public offering (IPO) of the now-defunct online toy retailer, eToys, Inc.
Goldman Hired as Lead Underwriter
Goldman served as eToys' fiduciary because eToys reposed great trust and confidence in Goldman in the pricing of the IPO and provided to this underwriter confidential information. Goldman exercised effective control over the pricing of the IPO. eToys placed utmost reliance on Goldman and accepted its recommended IPO price.
Goldman Owed No Fiduciary Duty
Dissent: Issues of Fact Remain
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