Law firm Wolf Popper has filed a class action lawsuit against Goldman Sachs Group, and certain of its senior officers in the US District Court for the Southern District of New York on behalf of investors who purchased Goldman securities between August 5, 2009 and April 16, 2010.
The complaint includes claims on behalf of those investors who purchased call options or sold put options, or who acquired Goldman common stock pursuant to option trades.
In 2008, the SEC began investigating Goldman for its role in a synthetic mortgage-based securities transaction, called ‘Abacus.’ According to the law firm, in Abacus, Goldman partnered with a hedge fund that wanted to short mortgage-related securities. Goldman structured a transaction where the hedge fund participated in selecting the mortgage products that Abacus’s performance was based on, knowing the hedge fund would be ‘short’ Abacus and was motivated to include the mortgage products it believed would perform most poorly. Goldman then sold Abacus without disclosing the hedge fund’s role to investors.
The following year, the SEC issued a Wells Notice indicating its intention to recommend that formal charges be filed against Goldman in connection with the Abacus transaction. According to the law firm, this information was not disclosed to shareholders.