Goldman Sachs facing class actions
June 23 2010, 10:08 am
It is understood that an American law firm, Brodsky & Smith, has announced a class action lawsuit in the United States District Court for the Southern District of New York seeking to recover damages on behalf of people who invested or purchased common stock of The Goldman Sachs Group, between the 5th of Feb 2007 and April 30th 2010.
What this case essentially refers to is the sub prime crisis in America and how major investment banks tried to hide or downplay their toxic assets. Unfortunately many major investment banks put together complex financial products with unsuitable foundations.
So when millions of Americans were unable to pay their mortgages, the financial products which contained millions of bad loans started losing money on the stock market and so the downward spiral began. Bad and over ambitious lending ending up costing much more than just property, the impact was felt around the world.
It is alleged that Goldman Sachs failed to disclose and misrepresented important facts, which the company had full knowledge of but was recklessly disregarded, particularly when marketing the financial products.
It is argued that statements about Goldman Sachs client focused business model, risk controls and business practices. In addition statements made in an effort to downplay profits made by Goldman Sachs from shorting the property market.
Essentially what this means is that Goldman Sachs placed bets that the property market would go down, and funnily enough it did. After all people had big mortgages and were living beyond their means, it was bound to.
Goldman Sachs also failed to disclose that the Securities and Exchange Commission (SEC) had opened an investigation into their activities since mid 2008, although how much of a difference it would have made is unclear due to the fact it was reported that nearly everyone at the SEC was far too busy looking at “inappropriate material” all day long.
This class action lawsuit is still gathering momentum and if you want to be part of the suit the deadline to apply is the 25th of June. If you are considering this you will need to contact the Law office of Brodsky & Smith.
