* Claims dismissed against Goldman, JPM, 40 others
* Investors say they were misled about GE’s financial health
* Some claims against GE, CFO Sherin still intact
By Nick Brown
NEW YORK, April 18 (Reuters) – A federal judge on Wednesday
dismissed claims against Goldman Sachs Group Inc,
JPMorgan Chase & Co and 40 other defendants that they
helped mislead investors in General Electric Co’s $12.2 billion
stock offering in 2008.
U.S. District Judge Denise Cote, who took over the case in
February, said a January ruling denying the defendents’ bid to
dismiss claims failed to consider key court rulings and
improperly relied on certain statements.
Cote’s ruling does not entirely dismiss the class action
lawsuit filed by GE investors, keeping intact claims that GE
and its chief financial officer, Keith Sherin, made
misleading statements about the quality of the company’s loan
portfolio.
The State Universities Retirement System of Illinois, the
lead plaintiff, filed the lawsuit in 2009, saying GE and myriad
financial firms were responsible for investor losses during a
six-month period when GE’s stock price fell to about $10 from
about $26.
The plaintiffs alleged that GE withheld information
regarding its health and the health of its GE Capital finance
arm, including exposures to subprime and other low-quality
loans. They also said GE misleadingly touted itself as being
safer than rivals, despite the effects of the financial crisis.
Among those dismissed from the lawsuit on Wednesday are
Barclays PLC, Citigroup and Bank of America Corp
.
“The January opinion improperly relied on statements that
were not incorporated into the offering documents, and on
statements that were modified and superseded by later
statements,” Cote said.
It also failed to take into account a court ruling that had
established rules on whether stated opinions could be grounds
for a lawsuit, Cote said.
Attorneys for the dismissed defendants did not respond to
requests for comment. Lawyers for the plaintiffs could not
immediately be reached.
A GE spokesman did not respond to an email seeking comment.
The case is In re: General Electric Co Securities
Litigation, U.S. District Court, Southern District of New York,
No. 09-01951.
