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Pension Fund Sues Goldman Board?
Submitted by Leo Kolivakis, publisher of Pension Pulse.
Brooke masters of the FT reports that Pension fund sues Goldman board:
A pension fund for fire and police officers has sued the board of Goldman Sachs, seeking to stop the investment bank from paying out billions of dollars in bonuses to the bank's staff, writes Brooke Masters in London.
Lawyers representing the Security Police and Fire Professionals of America Retirement Fund argue that the board has "abdicated" its responsibility to shareholders and "blindly "rewarded" executives for "corporate performance that has absolutely nothing to do with the skill of the company's employees".
The lawsuit, filed in New York late on Monday, claims that Goldman's 2009 profits are due to direct taxpayer help and $13bn used to bail out American International Group , a Goldman counter-party.
Lawyers from the firm Grant & Eisenhofer wrote in the complaint that paying 50 per cent of net revenues to staff constitutes "waste" and "elevates the interest of senior Goldman employees over those of shareholders".
Goldman said: "We think this lawsuit is entirely without merit."
This type of derivative lawsuit, in which shareholders sue a board for failing to perform its duty, has historically been very difficult to win. Cases in the New York state courts can take years to resolve.
Is the lawsuit really without merit? Would Goldman et al. have made a killing in trading profits had it not been for those government bailouts? Sure, they took the risk, made tons of money, but the fact remains they didn't risk their own capital, but the capital that was handed to them courtesy of American taxpayers.
Goldman can claim anything they want, including the "we have to pay top talent" card, but they demonstrate total political contempt and lack of judgment when they turn around and start rewarding obscene bonuses based on what quite frankly was a free call option. Take huge risks knowing that Uncle Sam will bail out the banks. No wonder everyone wants to own a bank.
It will be interesting to see if larger public pension funds join in on this lawsuit. I wouldn't count on it because the big public pension funds have a special relationship with Goldman and won't dare jeopardize it over a lawsuit that defends the rights of American taxpayers.
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God's company is up $2.65 on the news.
The bonuses equal $40 per share of common stock. Or looking at it another way it's $60 for every US citizen. I'm still wondering exactly what product or service Goldman sells to earn their money.
I'm not a lawyer, but the plaintiff has to show that the defendant's actions were negligent and were proximate cause for damages suffered by the defendant.
How was the plaintiff harmed? Are they shareholders? Is that obvious? Are they contending that mismanagement led to an undervaluing of the shares? Anyway, interesting stuff. Oh, yeah and the CAPTCHA is too easy, how about some Calculus?
I'm not a lawyer
Thank you but it's quite obvious.
so this is a shareholder suit then yes? if so, why don't they make it a class-action so that individual shareholders can join as well?
Of course it's with merit.
One could say that all of Goldman's profits came out of pension funds and 401K's/retail investors, via front-running, HFT, etc. GS owes all of us!
And in other news looks like everyone is suing everyone Leo...
http://www.theoaklandpress.com/articles/2009/12/15/news/local_news/doc4b27692ab3e9c283291431.txt
The Silverdome cost $57 million to build in 1975. It sold for $583K or roughly 1% of the 35 year ago construction cost. Somebody probably made a pretty good deal here.
Oh man. That WAS NOT SMART. They gonna get knocked the hell out.
Not too smart to be ripping off police and firemen Mr. Blankfein...
Never know what is going to happen now when you dial 911 my friend...
Just sayin'
goldman sachs and its ceo blankfien created the collapse of ous financial system and next to bernie screwed everyone everyone with a pension fund or mutual fund should follow the men in blue and help put goldman on the balls of there ass where they belong and call for ah
n audit of all the trades they have made during the crisis shut tn
hem down they pay no taxes on there profits and add nothing to the american public
"the big public pension funds have a special relationship with Goldman and won't dare jeopardize it over a lawsuit that defends the rights of American taxpayers."
If this is true they deserve whatever Goldman dishes out.