General Discussion Topics, page-114694

Stock price manipulation

Goldman Sachs was charged for repeatedly issuing research reports with extremely inflated financial projections for Exodus Communicationsand Goldman Sachs was accused of giving Exodus its highest stock rating even though Goldman knew Exodus did not deserve such a rating.^[58]

On July 15, 2003, Goldman Sachs, Lehman Brothers and Morgan Stanley were sued for artificially inflating the stock price of RSL Communications by issuing untrue or materially misleading statements in research analyst reports, and paid $3,380,000 for settlement.^[59]

Goldman Sachs is accused of asking for kickback bribes from institutional clients who made large profits flipping stocks which Goldman had intentionally undervalued in initial public offerings it was underwriting. Documents under seal in a decade-long lawsuit concerning eToys.com's initial public offering (IPO) in 1999 but released accidentally to the New York Times show that IPOs managed by Goldman were underpriced and that Goldman asked clients able to profit from the prices to increase business with it. The clients willingly complied with these demands because they understood it was necessary in order to participate in further such undervalued IPOs.^[60] Companies going public and their initial consumer stockholders are both defrauded by this practice.^[61]