Goldman Sachs 2015 Annual Report Download - page 214

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Cobalt International Energy Securities Litigation.
Cobalt International Energy, Inc. (Cobalt), certain of its
officers and directors (including employees of affiliates of
Group Inc. who served as directors of Cobalt), affiliates of
shareholders of Cobalt (including Group Inc.) and
underwriters (including GS&Co.) for certain offerings of
Cobalt’s securities are defendants in a putative securities
class action filed on November 30, 2014 in the U.S. District
Court for the Southern District of Texas. The consolidated
amended complaint, filed on May 1, 2015, asserts claims
under the federal securities laws, seeks compensatory and
rescissory damages in unspecified amounts and alleges
material misstatements and omissions concerning Cobalt in
connection with a $1.67 billion February 2012 offering of
Cobalt common stock, a $1.38 billion December 2012
offering of Cobalt’s convertible notes, a $1.00 billion
January 2013 offering of Cobalt’s common stock, a
$1.33 billion May 2013 offering of Cobalt’s common stock,
and a $1.30 billion May 2014 offering of Cobalt’s
convertible notes. The consolidated amended complaint
alleges that, among others, Group Inc. and GS&Co. are
liable as controlling persons with respect to all five
offerings. The consolidated amended complaint also seeks
damages from GS&Co. in connection with its acting as an
underwriter of 14,430,000 shares of common stock
representing an aggregate offering price of approximately
$465 million, $690 million principal amount of convertible
notes, and approximately $508 million principal amount of
convertible notes in the February 2012, December 2012
and May 2014 offerings, respectively, for an aggregate
offering price of approximately $1.66 billion. On
January 19, 2016, the court granted, with leave to replead,
the underwriter defendants’ motions to dismiss as to claims
by plaintiffs who purchased Cobalt securities after
April 30, 2013, but denied the motions to dismiss in all
other respects.
Solazyme, Inc. Securities Litigation. GS&Co. is among
the underwriters named as defendants in a putative securities
class action filed on June 24, 2015 in the U.S. District Court
for the Northern District of California. In addition to the
underwriters, the defendants include Solazyme, Inc.
(Solazyme) and certain of its directors and officers. As to the
underwriters, the complaints generally allege misstatements
and omissions in connection with March 2014 offerings by
Solazyme of approximately $63 million of common stock
and $150 million principal amount of convertible senior
subordinated notes, assert claims under the federal securities
laws, and seek compensatory damages in an unspecified
amount and rescission. Plaintiffs filed an amended complaint
on December 15, 2015, and defendants moved to dismiss on
February 12, 2016. GS&Co. underwrote 3,450,000 shares
of common stock and $150 million principal amount of
notes for an aggregate offering price of approximately
$187 million.
Employment-Related Matters. On September 15, 2010,
a putative class action was filed in the U.S. District Court
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 in specified areas 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
plaintiffs’ class allegations on the ground that plaintiffs
lacked standing to pursue certain equitable remedies and
denying Group Inc.’s and GS&Co.’s motion to strike
plaintiffs’ class allegations in their entirety as premature.
On March 21, 2013, the U.S. Court of Appeals for the
Second Circuit held that arbitration should be compelled
with one of the named plaintiffs, who as a managing
director was a party to an arbitration agreement with the
firm. On March 10, 2015, the magistrate judge to whom
the district judge assigned the remaining plaintiffs’
May 2014 motion for class certification recommended that
the motion be denied in all respects. On August 3, 2015, the
magistrate judge denied plaintiffs’ motion for
reconsideration of that recommendation and granted the
plaintiffs’ motion to intervene two female individuals, one
of whom was employed by the firm as of September 2010
and the other of whom is a current employee of the firm.
On August 17, 2015, the defendants appealed the
magistrate judge’s decision on intervention. On
September 28, 2015, the defendants moved to dismiss the
claims of an intervenor who is not a current employee of the
firm for lack of standing.
Investment Management Services. Group Inc. and
certain of its affiliates are parties to various civil litigation
and arbitration proceedings and other disputes with clients
relating to losses allegedly sustained as a result of the firm’s
investment management services. These claims generally
seek, among other things, restitution or other
compensatory damages and, in some cases, punitive
damages.
202 Goldman Sachs 2015 Form 10-K