Goldman Sachs 2013 Annual Report Download - page 213

Notes to Consolidated Financial Statements
market beginning in the fall of 2007, and that, as a result,
the claimant was forced to engage in a series of expensive
refinancing and conversion transactions after the failure of
the auction market in February 2008. Certain claimants
also allege that GS&Co. advised them to enter into interest
rate swaps in connection with their auction rate securities
issuances, causing them to incur additional losses. The
claims include breach of fiduciary duty, fraudulent
concealment, negligent misrepresentation, breach of
contract, violations of the Exchange Act and state securities
laws, and breach of duties under the rules of the Municipal
Securities Rulemaking Board and the NASD. One claimant
has also filed a complaint against GS&Co. in federal court
asserting the same claims as in the FINRA arbitration.
GS&Co. filed complaints and motions in federal court
seeking to enjoin certain of the arbitrations pursuant to the
exclusive forum selection clauses in the transaction
documents, which have been denied in one case and granted
in others, and in each case has been appealed.
Commodities-Related Litigation. Group Inc. and its
subsidiaries, GS Power Holdings LLC and Metro
International Trade Services LLC, are among the
defendants in a number of putative class actions filed
beginning on August 1, 2013 and consolidated in the U.S.
District Court for the Southern District of New York. The
complaints generally allege violation of federal antitrust
laws and other federal and state laws in connection with the
management of aluminum storage facilities. The complaints
seek declaratory, injunctive and other equitable relief as
well as unspecified monetary damages, including
treble damages.
Currencies-Related Litigation. GS&Co. and Group Inc.
are among the defendants named in several putative
antitrust class actions relating to trading in the foreign
exchange markets, filed since December 2013 in the U.S.
District Court for the Southern District of New York. The
complaints generally allege that defendants violated federal
antitrust laws in connection with an alleged conspiracy to
manipulate the foreign currency exchange markets and seek
declaratory and injunctive relief as well as treble damages in
an unspecified amount.
Regulatory Investigations and Reviews and Related
Litigation. Group Inc. and certain of its affiliates are
subject to a number of other investigations and reviews by,
and in some cases have received subpoenas and requests for
documents and information from, various governmental
and regulatory bodies and self-regulatory organizations and
litigation relating to various matters relating to the firm’s
businesses and operations, including:
‰the 2008 financial crisis;
‰the public offering process;
‰the firm’s investment management and financial
advisory services;
‰conflicts of interest;
‰research practices, including research independence and
interactions between research analysts and other firm
personnel, including investment banking personnel, as
well as third parties;
‰transactions involving municipal securities, including
wall-cross procedures and conflict of interest disclosure
with respect to state and municipal clients, the trading
and structuring of municipal derivative instruments in
connection with municipal offerings, political
contribution rules, underwriting of Build America Bonds,
municipal advisory services and the possible impact of
credit default swap transactions on municipal issuers;
‰the sales, trading and clearance of corporate and
government securities, currencies, commodities and other
financial products and related activities, including
compliance with the SEC’s short sale rule, algorithmic
and quantitative trading, futures trading, options trading,
transaction reporting, technology systems and controls,
securities lending practices, trading and clearance of
credit derivative instruments, commodities activities and
metals storage, private placement practices, allocations of
and trading in fixed-income securities, trading activities
and communications in connection with the
establishment of benchmark rates and compliance with
the U.S. Foreign Corrupt Practices Act; and
‰insider trading, the potential misuse of material nonpublic
information regarding private company and
governmental developments and the effectiveness of the
firm’s insider trading controls and information barriers.
Goldman Sachs is cooperating with all such regulatory
investigations and reviews.
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