Goldman sued by investors
Shareholders are slamming Goldman Sachs Group Inc. since the government accused the firm’s investment bank of fraud less than three weeks ago.
In a filing Monday with the Securities and Exchange Commission, Goldman detailed seven legal actions that shareholders have taken against the firm since April 16, when the SEC sued the firm in federal court in Manhattan, alleging that it defrauded investors who bought a complex mortgage-linked security from the firm.
Some of the new litigation was brought by investors who say they lost money on their holdings of Goldman stock -- a standard complaint in shareholder suits -- because the company did not disclose the risk of SEC action. The SEC warned Goldman last year of a possible suit, allowing the firm to respond. But Goldman didn’t alert shareholders to those communications.
Other complaints add the SEC’s allegations to suits already filed. A union pension fund submitted an amended complaint in a lawsuit challenging the structure and size of Goldman’s executive bonuses. The suit now alleges that those bonuses led to unethical behavior.
“The pursuit of huge profits has given rise to an expansion of Goldman’s trading business that is a ‘moral bankruptcy,’ fraught with conflicts of interest and the systemic breaking of ethical lines,” says the complaint, filed in state court in Delaware.
Goldman said it expected to face more, similar litigation. The firm has called the SEC’s allegations unfounded.
