Goldman Sachs 2015 Annual Report Download - page 217

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Group Inc., GS&Co. and Goldman Sachs Canada Inc. are
among the defendants named in putative class actions
related to trading in foreign exchange markets, filed
beginning in September 2015 in the Superior Court of
Justice in Ontario, Canada and the Superior Court of
Quebec, Canada, on behalf of direct and indirect
purchasers of foreign exchange instruments traded in
Canada. The complaints generally allege a conspiracy to
manipulate the foreign currency exchange markets and
assert claims under Canada’s Competition Act and
common law. The Ontario and Quebec complaints seek,
among other things, compensatory damages in the amounts
of 1 billion Canadian dollars and 100 million Canadian
dollars, respectively, as well as restitution and 50 million
Canadian dollars in punitive, exemplary and aggravated
damages.
Interest Rate Swap Antitrust Litigation. Group Inc.,
GS&Co., GSI, GS Bank USA and Goldman Sachs Financial
Markets, L.P. are among the defendants named in a
putative antitrust class action relating to the trading of
interest rate swaps, filed on November 25, 2015 in the U.S.
District Court for the Southern District of New York. The
complaint generally alleges a conspiracy among the dealers
and brokers since at least January 1, 2008 to preclude
exchange trading of interest rate swaps. The complaint
seeks declaratory and injunctive relief as well as treble
damages in an unspecified amount.
Compensation-Related Litigation. On June 9, 2015,
Group Inc. and certain of its current and former directors
were named as defendants in a purported shareholder
derivative action in the Court of Chancery of the State of
Delaware. The derivative complaint alleges that excessive
compensation has been paid to such directors since 2012.
The derivative complaint includes allegations of breach of
fiduciary duty and unjust enrichment and seeks, among
other things, unspecified monetary damages, disgorgement
of director compensation and reform of the firm’s stock
incentive plan. On September 30, 2015, the defendants
movedtodismiss.
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, municipal advisory services and the
possible impact of credit default swap transactions on
municipal issuers;
‰The offering, auction, sales, trading and clearance of
corporate and government securities, currencies,
commodities and other financial products and related sales
and other communications and activities, including
compliance with the SEC’s short sale rule, algorithmic,
high-frequency and quantitative trading, the firm’s U.S.
alternative trading system (dark pool), futures trading,
options trading, when-issued 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
securities, and trading activities and communications in
connection with the establishment of benchmark rates,
such as currency rates and the ISDAFIX benchmark rates;
‰Compliance with the U.S. Foreign Corrupt Practices Act;
‰The firm’s hiring and compensation practices;
‰The firm’s system of risk management and controls; and
‰Insider trading, the potential misuse and dissemination of
material nonpublic information regarding corporate 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.
Goldman Sachs 2015 Form 10-K 205