In another story by Jonathan Stempel in The Chicago Tribune, we find that Goldman Sachs's Abacus products are still making waves and damaging Goldman Sachs's reputation. Note that it is the middle class that suffers from GS's actions as shown below:
Pension funds to lead suit vs. Goldman over Abacus
by Jonathan Stempel, edited by Bernard Orr - The Chicago Tribune
NEW YORK (Reuters) - A Manhattan federal judge on Friday named three pension funds as co-lead plaintiffs in an investor lawsuit against Goldman Sachs Group Inc to recover losses tied to the Wall Street's bank's alleged misleading statements about Abacus, a product linked to subprime mortgages.
U.S. District Judge Paul Crotty 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. The funds are represented by the law firms Robbins Geller Rudman & Dowd LLP and Labaton Sucharow LLP.
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.
In its civil complaint, the SEC accused Goldman and Tourre of failing to tell investors that the hedge fund Paulson & Co helped choose bet against securities underlying Abacus.
The investors contended that the charges, Goldman's failure to disclose it had earlier received a "Wells notice" indicating that charges might be brought, and news of a possible U.S. Department of Justice probe caused the bank's shares to fall 21 percent in just over two weeks.
Goldman agreed last July to settle the SEC case for $550 million, without admitting wrongdoing. Tourre, the only individual sued in the case, has also denied wrongdoing, and is still defending against the SEC lawsuit.
Other investor lawsuits over Abacus have been brought against Goldman or company officials in other jurisdictions.
Read the full article here