Embattled Goldman Sachs is facing a flurry of lawsuits from shareholders, mainly related to certain complex financial products sold by the banking major, after the US market regulator charged the entity with defrauding investors.
The Wall Street major has been flooded with lawsuits since April 22, nearly a week after the US Securities and Exchange Commission accused the entity of causing losses of over $1 billion to investors by misrepresenting facts about a complex financial product tied to sub-prime mortgages.
Moreover, Goldman Sachs has been warned that it could face more litigation in the future, especially related to collateralised debt obligations.
In a regulatory filing on Monday, Goldman Sachs said that it is facing shareholder claims for 'breach of fiduciary duty, corporate waste, abuse of control, mismanagement and unjust enrichment in connection with CDO offerings made between 2004 and 2007 and challenging the accuracy and completeness of Goldman Sachs's disclosure.'
The lawsuits have been filed against Goldman Sachs, its board of directors and certain officers and employees of the entity and its affiliates.
The SEC moved the court against Goldman Sachs on April 16.
"Since April 22, 2010, several putative shareholder derivative actions have been filed in the New York Supreme Court, New York County and the United States District Court for the Southern District of New York," the filing said.
The complainants are seeking declaratory relief, unspecified compensatory damages, restitution and certain corporate governance reforms, among other action.
"Goldman Sachs anticipates that additional putative shareholder derivative actions and other litigation may be filed and regulatory and other investigations and actions commenced, with respect to offerings of CDOs," the filing noted.
The banking major has refuted SEC charges, saying that the accusations are unfounded in 'law and fact'.
Going by reports, the entity is also facing probes by the US Department of Justice and the Attorney General of New York in the wake of the SEC lawsuit.
Many Wall Street corporations, including Goldman Sachs, have been criticised for selling many products related to the sub-prime mortgage market and such instruments were even blamed for the financial crisis that rattled the world.
Image: Goldman Sachs headquarters in New York. Photograph: Reuters
