Goldman Sachs 2013 Annual Report Download - page 211

Notes to Consolidated Financial Statements
Private Equity-Sponsored Acquisitions Litigation.
Group Inc. is among numerous private equity firms named
as defendants in a federal antitrust action filed in the U.S.
District Court for the District of Massachusetts in
December 2007. As amended, the complaint generally
alleges that the defendants have colluded to limit
competition in bidding for private equity-sponsored
acquisitions of public companies, thereby resulting in lower
prevailing bids and, by extension, less consideration for
shareholders of those companies in violation of Section 1 of
the U.S. Sherman Antitrust Act and common law. The
complaint seeks, among other things, treble damages in an
unspecified amount. On March 13, 2013, the court granted
in part and denied in part defendants’ motions for summary
judgment, rejecting plaintiffs’ theory of overarching
collusion, but permitting plaintiffs’ claims to proceed based
on narrower theories. On October 21, 2013, plaintiffs
moved for class certification.
RALI Pass-Through Certificates Litigation. GS&Co. is
among numerous underwriters named as defendants in a
putative securities class action initially filed in
September 2008 in New York Supreme Court, and
subsequently removed to the U.S. District Court for the
Southern District of New York. As to the underwriters,
plaintiffs allege that the offering documents in connection
with various offerings of mortgage-backed pass-through
certificates violated the disclosure requirements of the
federal securities laws. In addition to the underwriters, the
defendants include Residential Capital, LLC (ResCap),
Residential Accredit Loans, Inc. (RALI), Residential
Funding Corporation (RFC), Residential Funding Securities
Corporation (RFSC), and certain of their officers and
directors. On January 3, 2013, the district court certified a
class in connection with one offering underwritten by
GS&Co. which includes only initial purchasers who bought
the securities directly from the underwriters or their agents
no later than ten trading days after the offering date. On
April 30, 2013, the district court granted in part plaintiffs’
request to reinstate a number of the previously dismissed
claims relating to an additional nine offerings underwritten
by GS&Co. On May 10, 2013, the plaintiffs filed an
amended complaint incorporating those nine additional
offerings. On December 27, 2013, the court granted the
plaintiffs’ motion for class certification as to the nine
additional offerings but denied the plaintiffs’ motion to
expand the time period and scope covered by the previous
class definition. On January 10, 2014, defendants
petitioned for leave to appeal the December 27, 2013 class
certification order.
GS&Co. underwrote approximately $5.57 billion principal
amount of securities to all purchasers in the offerings
included in the amended complaint. On May 14, 2012,
ResCap, RALI and RFC filed for Chapter 11 bankruptcy in
the U.S. Bankruptcy Court for the Southern District of New
York. On June 28, 2013, the district court entered a final
order and judgment approving a settlement between
plaintiffs and ResCap, RALI, RFC, RFSC and their officers
and directors named as defendants in the action.
MF Global Securities Litigation. GS&Co. is among
numerous underwriters named as defendants in class action
complaints filed in the U.S. District Court for the Southern
District of New York commencing November 18, 2011.
These complaints generally allege that the offering
materials for two offerings of MF Global Holdings Ltd.
convertible notes (aggregating approximately $575 million
in principal amount) in February 2011 and July 2011,
among other things, failed to describe adequately the
nature, scope and risks of MF Global’s exposure to
European sovereign debt, in violation of the disclosure
requirements of the federal securities laws. On
November 12, 2013, the court denied the defendants’
motions to dismiss the amended complaint. GS&Co.
underwrote an aggregate principal amount of
approximately $214 million of the notes. On
October 31, 2011, MF Global Holdings Ltd. filed for
Chapter 11 bankruptcy in the U.S. Bankruptcy Court in
Manhattan, New York.
GS&Co. has also received inquiries from various
governmental and regulatory bodies and self-regulatory
organizations concerning certain transactions with MF
Global prior to its bankruptcy filing. Goldman Sachs is
cooperating with all such inquiries.
Employment-Related Matters. On September 15, 2010,
a putative class action was filed in the U.S. District for the
Southern District of New York by three female former
employees alleging that Group Inc. and GS&Co. have
systematically discriminated against female employees in
respect of compensation, promotion, assignments,
mentoring and performance evaluations. The complaint
alleges a class consisting of all female employees employed
at specified levels by Group Inc. and GS&Co. since
July 2002, and asserts claims under federal and New York
City discrimination laws. The complaint seeks class action
status, injunctive relief and unspecified amounts of
compensatory, punitive and other damages. On
July 17, 2012, the district court issued a decision granting in
part Group Inc.’s and GS&Co.’s motion to strike certain of
Goldman Sachs 2013 Annual Report 209