January 11, 2010 (PLANSPONSOR.com) - Goldman Sachs Group Inc has been sued by an Illinois pension fund seeking to recover billions of dollars of bonuses and other compensation being awarded for 2009, saying the payouts harm shareholders.
According to Reuters, in a lawsuit filed in New York state supreme court in Manhattan on behalf of shareholders, the Central Laborers' Pension Fund said Goldman had by September 25 set aside nearly $17 billion for compensation - and might pay out more than $22 billion for the year. It said this "highlights the complete breakdown" of corporate oversight.
“Defendants’ conduct shows that, even though Goldman is supposedly owned by public shareholders, defendants have scant regard for the interests of those shareholders,” the suit alleges. The lawsuit says that Goldman's revenue for the year was artificially inflated by government bailouts, as well as a change in Goldman's fiscal year.
Goldman spokesman Michael DuVally called the lawsuit "completely without merit." Other defendants are Chairman and Chief Executive Lloyd Blankfein, Chief Operating Officer Gary Cohn, Vice Chairman J. Michael Evans, Chief Financial Officer David Viniar, and 10 directors.
In its lawsuit, the Illinois fund, which bought shares in Goldman Sachs in January 2009, is seeking damages sustained by shareholders, restitution from executive officer defendants, corporate governance changes and other remedies.
A Goldman Sachs spokesman told the Associated Press that "the suit is completely without merit."
The case is Central Laborers' Pension Fund v. Blankfein et al, New York State Supreme Court, New York County, No. 600036/2010.