Financial giants Goldman Sachs Group Inc. and Morgan Stanley are facing a lawsuit by shareholders of Chinese e-commerce firm Vipshop Holdings Ltd. for supposed insider trading involving Archegos Capital stock, Bloomberg reported.
- Vipshop Holdings Ltd. investors filed the suit before a New York federal court, claiming that the two firms supposedly unloaded Archegos holdings after confidentially being made aware of its financial woes.
- Goldman let go of $6.6-billion worth of shares of Baidu Inc., Tencent Music Entertainment Group, and Vipshop prior to the opening of the Market on March 27, 2021 and sold $3.9 billion of shares in ViacomCBS Inc., Discovery Inc., Farfetch Ltd., iQiyi Inc., and GSX Techedu Inc.
- Archegos went into turmoil in March after over $100 billion in positions slipped, triggering margin calls from banks that later unloaded their holdings. This caused over $10 billion in losses to lenders and internal probes on officials.
Goldman has declined to comment on the matter, while Morgan Stanley did not immediately comment. GS is down 1.13%, MS down 0.43%, while VIPS up 4.09%.