Goldman Sachs and Morgan Stanley Win Appeal in Archegos Collapse Case

Goldman Sachs and Morgan Stanley have secured a legal victory in an appeal tied to the 2021 collapse of Archegos Capital. The U.S. Court of Appeals in Manhattan ruled that the banks were not liable for alleged insider trading, dismissing claims by stock investors who accused them of tipping off select clients about Archegos' impending downfall.

Judge Maria Araujo Kahn's decision highlighted a lack of evidence supporting the insider trading allegations. The ruling also noted no formal agreement existed for the banks to act in Archegos' interest. This outcome follows a $120 million settlement by both banks with ViacomCBS shareholders earlier this year.

The Archegos saga remains a cautionary tale about leveraged positions and counterparty risk in equity markets. While the case didn't involve cryptocurrency directly, its resolution reinforces the importance of transparency in institutional trading practices—a principle equally critical in digital asset markets.