Goldman Sachs Shareholder Lawsuit Damages
While Goldman Sachs recently settled the Securities and Exchange Commission’s civil fraud case for $550 million, the company still faces potential liability for related damage claims made by investors. Steven Feinstein, a professor of finance at Babson College and President of the economic consulting firm Crowninshield Financial Research, has estimated that damages in the shareholder lawsuits may range from $1.6 billion to $2.8 billion, depending on when the alleged fraud is assumed to have begun.
On April 16, 2010 the SEC filed a civil fraud suit against Goldman Sachs related to its role in the ABACUS 2007-AC1 transaction. On this news, Goldman’s stock price declined significantly and shareholders suffered losses, prompting numerous class action lawsuits. Goldman settled with the SEC on July 15, 2010 without admitting any wrongdoing. The investors’ lawsuits, however, remain.
About Crowninshield Financial Research
Crowninshield Financial Research, LLC is a Boston-based consulting firm that provides expert analysis and testimony in the fields of economics, finance, and accounting. For more information about Crowninshield Financial Research and its affiliated experts, visit http://www.cfrllc.com. Steven Feinstein may be reached at Feinstein@Babson.edu and (781) 237-4800.