(July 9, 2010) — Goldman Sachs Group Inc. is pushing for a federal judge to merge the 18 shareholder lawsuits it faces ahead of a US Securities and Exchange Commission civil fraud lawsuit.
The Wall Street bank faces seven securities class-action complaints, eight derivative complaints in Manhattan federal court, two derivative complaints in a New York state court, and another in a Delaware state court. The private lawsuits demand compensation from the bank, action against execs, and changes to how the firm operates. Goldman said it expected to have additional litigation in the future.
Goldman’s lawyer, Gandolfo DiBlasi from Sullivan & Cromwell LLP, claims the complaints are “substantially similar” and make “overlapping” allegations, including many from the SEC lawsuit, adding that the bank does not oppose a motion by the Teamsters Allied Benefit Funds to combine the eight derivative complaints overseen by U.S. District Judge Paul Crotty in Manhattan, Reuters reported.
The Louisiana Municipal Police Employees Retirement System (MPERS) is a plaintiff in one of the suits. The Southeastern Pennsylvania Transportation Authority and International Brotherhood of Electrical Workers Local 98 Pension Fund are co-lead plaintiffs in another. The funds claim that Goldman’s trading business has been conducted unethically and assert that the SEC charge could threaten the Wall Street firm’s reputation in the long run.
On April 16, the SEC accused Goldman Sachs of fraud in failing to disclose conflicts in mortgage securities, which cost investors more than $1 billion and fueled the worst financial crisis since the Great Depression. While the housing market crumbed, shareholders say Goldman profited by betting against the mortgage investments it marketed to its customers.
The bank faces a court-imposed July 19 deadline to respond to the SEC lawsuit.
To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742