Goldman Sachs settles lawsuit over eToys I.P.O

Toys - GoĢˆzde Otman

As JPMorgan Chase works its way through its own legal morass, it can look to Goldman Sachs for an example of how long litigation can haunt a bank.

The New York Times reports that Goldman is poised to leave behind a long-running lawsuit over the 1999 initial public offering of eToys, an online toy retailer whose rise and fall became a symbol of the dotcom boom and bust.

A federal judge on Thursday approved a settlement of the matter, in which the investment bank will pay $7.5m to eToys creditors.

Though many of the specters of the dotcom frenzy have dissipated - and among them - eToys has lingered in legal system, including in courts in New York and Delaware.

At issue is the company’s I.P.O., which Goldman priced at $20. Shares in eToys leaped well above that in their first day of trading, closing at $77.

Critics of the process, including creditors, have argued that the Goldman-led offering enriched special clients of the firm at the expense of the retailer, which could have used the money to build much-needed infrastructure to keep up with demand.

Hit the link below to access the complete New York Times article:

Goldman Settles Lawsuit Over eToys I.P.O.

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