08:21 AM EDT, 04/05/2024 (MT Newswires) -- Morgan Stanley ( MS ) and Goldman Sachs ( GS ) face potential lawsuits after a New York state appeals court in Manhattan ruled former ViacomCBS investors may sue the banks over their underwriting two stock offerings for the media company, Reuters reported late Thursday.

The New York state appeals court's decision follows a federal judge's dismissal of a similar lawsuit against the banks by investors in ViacomCBS and other stocks once held by Archegos Capital Management.

Investors allege the banks concealed their role in total return swaps for Archegos, leading to losses as the firm collapsed in March 2021.

Goldman and Morgan Stanley ( MS ) argued the banks already implemented extensive measures to prevent conflicts of interest, safeguard client information, and deter insider trading, according to the report.

The state appeals court ruled ViacomCBS' banks must disclose transactions impacting stock prices.

Goldman Sachs ( GS ) and Morgan Stanley ( MS ) did not immediately respond to MT Newswires' requests for comment.