Key takeaways:

• Judge Paul Crotty of the U.S. District Court for the Southern District of New York recently held that Goldman Sachs & Co. did not have a duty under Section 10(b) or applicable SEC regulations to disclose receipt of Wells Notices from the Securities and Exchange Commission ("SEC") by the firm and two employees.
• Goldman did not have a duty to disclose the Wells Notices to prevent Goldman's existing disclosures about an SEC investigation from being materially inaccurate or incomplete because Wells Notices are not intended to signal litigation, "but only the desire of the Enforcement staff to move forward, which it has no power to effectuate." Judge Crotty concluded that "[t]his contingency need not be disclosed" to prevent Goldman's prior disclosures from being materially misleading.
• Goldman also did not have an affirmative legal obligation under SEC rules to disclose the Wells Notices because a company's duty to disclose under these requirements is not triggered until "the regulatory investigation matures to the point where litigation is apparent and substantially certain to occur."