Goldman Sued by Pension Fund over Bonus Plans

[Robbien]

Source: Reuters

Goldman Sachs was sued on Thursday by an Illinois pension fund seeking to recover billions of dollars of bonuses and other compensation being awarded for 2009, saying the payouts harm shareholders.

In a lawsuit filed in New York state supreme court in Manhattan on behalf of shareholders, the Central Laborers' Pension Fund said Goldman had by Sept. 25 set aside nearly $17 billion for compensation and might pay out more than $22 billion for the year. It said this "highlights the complete breakdown" of corporate oversight.

The lawsuit contends that Goldman's revenue for the year was artificially inflated by government bailouts of the banking industry and the insurer American International Group, as well as a change in Goldman's fiscal year.

Such sums, and Goldman's practice of continuing to pay out nearly 50 percent of net revenue as compensation, show "scant regard" for the interests of shareholders, it said.

Goldman spokesman Michael DuVally called the lawsuit "completely without merit." Other defendants are Chairman and Chief Executive Lloyd Blankfein, Chief Operating Officer Gary Cohn, Vice Chairman J. Michael Evans, Chief Financial Officer David Viniar, and 10 directors.

An individual shareholder, Ken Brown, filed a similar lawsuit in the same court on Tuesday.



Read more: http://www.cnbc.com/id/34759718

[tabatha]

1. Good, and they have every right to do so.

[jpak]

2. Good

:thumbsup:

[GreenPartyVoter]

3. +another thumbs up

[drm604]

4. This could be just the start.

We could see other shareholder groups bringing these types of suits.

[gweema]

6. Let's hope it is just the start

What the banks did is really no different than Bernie Madoff's ponzi scheme. I think criminal charges should accompany the civil suits, though.

[Canuckistanian]

5. About bloody time

Investors and shareholders LOSE when these gigantic bonuses are paid out. Good to see them finally start to sue over it.

And I hope this starts a trend.

[Vidar]

7. Good.