Goldman Sachs (GS)Investors File Securities Class Action Lawsuits and Shareholder Derivative Actions Against Goldman Sachs Over Formation and Sale of Abacus 2007-AC1 Collateralized Debt Obligation CDO.
Multiple securities class action lawsuits and shareholder derivative lawsuits have been filed against Goldman Sachs, including a suit against Goldman Sachs Group, Inc., Lloyd C. Blankfein, David A. Viniar and Gary D. Cohn (collectively “defendants”) in the U.S. District Court for the Southern District of New York on behalf of purchasers of the common stock of Goldman Sachs Group (GS) between October 15, 2009 and April 16, 2010 (the date that it was publicly disclosed that the U.S. Securities and Exchange Commission (“SEC”) had sued Goldman Sachs in connection with the structuring and marketing of a synthetic collateralized debt obligation (“CDO”) known as ABACUS 2007-AC1, according to published class action news reports.
A Goldman Sachs Abacus securities class action complaint reportedly alleges, among other things, that the defendants failed to disclose that Goldman Sachs had, allegedly in violation of securities laws, not fully disclosed the facts concerning the formation and sale of the ABACUS 2007-AC1 deal to Goldman Sachs investors, that Goldman Sachs bet against its clients and constructed collateralized debt obligations CDOs that were likely to fail; and that Goldman Sachs received a Wells Notice from the SEC about the ABACUS transaction but failed to inform Goldman Sachs shareholders.
According to a recent Goldman Sachs SEC form 8-K filing, several putative shareholder derivative actions have been filed in New York Supreme Court, New York County, and the United States District Court for the Southern District of New York against The Goldman Sachs Group, Inc. (GS), Goldman Sachs’s Board of Directors (Board), and certain officers and employees of Goldman Sachs GS and its affiliates generally alleging claims for breach of fiduciary duty, corporate waste, abuse of control, mismanagement and unjust enrichment in connection with collateralized debt obligation CDO offerings made between 2004 and 2007, and challenging the accuracy and completeness of Goldman Sachs GS Inc.’s disclosure.
Plaintiffs in an existing shareholder derivative action in the Delaware Court of Chancery relating to compensation levels for 2009 have reportedly amended their complaint to add similiar allegations against Goldman Sachs. The Goldman Sachs shareholder derivative complaints seek, among other things, declaratory relief, unspecified compensatory damages, restitution and certain corporate governance reforms.