NEW YORK, April 23 (Reuters) - Goldman Sachs Group Inc's Chief Executive Lloyd Blankfein and other company officials are being sued by shareholders in two lawsuits related to fraud allegations brought by the federal government.
In complaints filed on Thursday in New York State Supreme Court in Manhattan, Robert Rosinek and Morton Spiegel accused company executives and directors of breaching their fiduciary duties by allowing the company to enter into a series of transactions, known as Abacus, that involved collateralized debt obligations tied to subprime mortgages.
Abacus was the subject of a U.S. Securities and Exchange Commission civil fraud lawsuit filed against Goldman on April 16.
The SEC accused Goldman of failing to tell clients that the securities they were buying had been created by billionaire hedge fund investor John Paulson, who stood to benefit if the securities lost value. Goldman has called the SEC's allegations unfounded, and Paulson has not been charged.
Among the defendants in the New York state lawsuits is Fabrice Tourre, who the SEC said was mainly responsible for creating the transaction.
The state lawsuits are derivative lawsuits, which shareholders bring on behalf of companies, rather than on their own behalf, to enforce or defend rights that the companies fail to address on their own.
Goldman spokesman Ed Canaday declined immediate comment, saying the company had not yet reviewed the complaints.
The lawsuits seek a declaration that the individual defendants violated their fiduciary duties, plus compensatory damages from them. Companies sometimes agree to governance changes in resolving such lawsuits.
The cases are Rosinek v. Blankfein et al, New York State Supreme Court, New York County, No. 650318/2010, and Spiegel v. Blankfein et al in the same court, No. 650319/2010.
(Reporting by Grant McCool and Jonathan Stempel) Keywords: GOLDMAN/LAWSUITS (jon.stempel@thomsonreuters.com +1 646 223 6317; Reuters Messaging: jon.stempel.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
In complaints filed on Thursday in New York State Supreme Court in Manhattan, Robert Rosinek and Morton Spiegel accused company executives and directors of breaching their fiduciary duties by allowing the company to enter into a series of transactions, known as Abacus, that involved collateralized debt obligations tied to subprime mortgages.
Abacus was the subject of a U.S. Securities and Exchange Commission civil fraud lawsuit filed against Goldman on April 16.
The SEC accused Goldman of failing to tell clients that the securities they were buying had been created by billionaire hedge fund investor John Paulson, who stood to benefit if the securities lost value. Goldman has called the SEC's allegations unfounded, and Paulson has not been charged.
Among the defendants in the New York state lawsuits is Fabrice Tourre, who the SEC said was mainly responsible for creating the transaction.
The state lawsuits are derivative lawsuits, which shareholders bring on behalf of companies, rather than on their own behalf, to enforce or defend rights that the companies fail to address on their own.
Goldman spokesman Ed Canaday declined immediate comment, saying the company had not yet reviewed the complaints.
The lawsuits seek a declaration that the individual defendants violated their fiduciary duties, plus compensatory damages from them. Companies sometimes agree to governance changes in resolving such lawsuits.
The cases are Rosinek v. Blankfein et al, New York State Supreme Court, New York County, No. 650318/2010, and Spiegel v. Blankfein et al in the same court, No. 650319/2010.
(Reporting by Grant McCool and Jonathan Stempel) Keywords: GOLDMAN/LAWSUITS (jon.stempel@thomsonreuters.com +1 646 223 6317; Reuters Messaging: jon.stempel.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.