Pension Funds to Lead Lawsuit against Goldman Sachs

March 28, 2011 ( - A federal judge named three pension funds as co-lead plaintiffs in an investor lawsuit against Goldman Sachs Group Inc.

Reuters reports that U.S. District Judge Paul Crotty of the U.S. District Court for the Southern District of New York designated the Arkansas Teachers Retirement System, the West Virginia Investment Management Board, and the Plumbers and Pipefitters National Pension Group in Alexandria, Virginia, to lead six consolidated lawsuits against Goldman and various of its officers and directors. Crotty said the funds had the largest financial losses connected with the case of any of the proposed plaintiffs, according to the news report.  

The litigation arose after the U.S. Securities and Exchange Commission last April 16 sued Goldman and Fabrice Tourre, one of its vice presidents, over Abacus, a 2007 collateralized debt obligation transaction (see CDO Complaints Stack up for Goldman Sachs). Reuters said the investors contended that the charges, Goldman’s failure to disclose it had earlier received a “Wells notice” indicating that charges might be brought (see FINRA Fines Goldman over Wells Notice Flap), and news of a possible U.S. Department of Justice probe caused the bank’s shares to fall 21% in just over two weeks.

Goldman agreed last July to settle the SEC case for $550 million, without admitting wrongdoing. Tourre has also denied wrongdoing, and is still defending against the SEC lawsuit.