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Goldman's Blankfein in fraud case | Goldman's Blankfein in fraud case |
(about 2 hours later) | |
Goldman Sachs' chief executive, Lloyd Blankfein, is being sued by shareholders. | |
He and other company officials have been named in two new lawsuits filed on Thursday. | |
The cases are related to fraud allegations brought last week by the US federal government. | The cases are related to fraud allegations brought last week by the US federal government. |
These latest complaints were filed in the New York State Supreme Court. Two shareholders accuse them of breaching their fiduciary duties. | These latest complaints were filed in the New York State Supreme Court. Two shareholders accuse them of breaching their fiduciary duties. |
They say the executives did this by allowing Goldman's to enter into a series of transactions, known as Abacus, involving investments tied to subprime mortgages. Abacus was the subject of a civil fraud lawsuit filed against Goldman on 16 April by the US financial watchdog, the Securities and Exchange Commission. | They say the executives did this by allowing Goldman's to enter into a series of transactions, known as Abacus, involving investments tied to subprime mortgages. Abacus was the subject of a civil fraud lawsuit filed against Goldman on 16 April by the US financial watchdog, the Securities and Exchange Commission. |
GOLDMAN SACHS GROUP INC.Last updated: 23 Apr 2010, 20:59 UK *Chart shows local time pricechange%157.40-1.65-1.04 More data on this share price | GOLDMAN SACHS GROUP INC.Last updated: 23 Apr 2010, 20:59 UK *Chart shows local time pricechange%157.40-1.65-1.04 More data on this share price |
That concerns Goldman's marketing of sub-prime mortgage investments just as the US housing market faltered. | That concerns Goldman's marketing of sub-prime mortgage investments just as the US housing market faltered. |
The SEC said Goldman failed to disclose "vital information" that one of its clients, Paulson & Co, helped choose which securities were packaged into the mortgage portfolio. | The SEC said Goldman failed to disclose "vital information" that one of its clients, Paulson & Co, helped choose which securities were packaged into the mortgage portfolio. |
These securities were sold to investors in 2007. | These securities were sold to investors in 2007. |
But Goldman did not disclose that Paulson, one of the world's largest hedge funds, had bet that the value of the securities would fall. | But Goldman did not disclose that Paulson, one of the world's largest hedge funds, had bet that the value of the securities would fall. |
Goldman has called those allegations unfounded. | Goldman has called those allegations unfounded. |
There was no immediate comment on the latest development from Goldman Sachs. | There was no immediate comment on the latest development from Goldman Sachs. |