Underwriters Lose Bid to Remove IPO Judge

Goldman Sachs Group Inc. and other underwriters lost a bid to oust the judge presiding over suits accusing them of rigging initial public offerings, after an appeals court ruled that the judge’s investments were a minor issue that didn’t justify removal.

Thirty-nine investment banks, including Deutsche Banc Alex. Brown Inc. and Credit Suisse First Boston Corp., sought to force U.S. District Judge Shira Scheindlin to step down from the case, which accuses the defendants of manipulating hundreds of IPOs. The banks said she invested in 14 IPOs and lost money in several of them.

“Congress did not consider judges with minor interests in a class action to be parties to a proceeding once they have divested themselves of said financial interest,” the U.S. 2nd Circuit Court of Appeals said.