More short selling woes for Goldman Sachs
27 March 2012 California
Image: Shutterstock
Two Silicon Valley entrepreneurs have joined recent claimants in suing Goldman Sachs over short selling.
Married couple Sehat Sutardja and Weili Dai, co-founders and executives of the semiconductor company Marvell Technologies, say the Wall Street firm mislabeled shares in the couple's brokerage account in order to be able to assist short-sellers who were betting against the company the couple founded.
"Goldman had no legal right to lend out shares that didn't belong to the firm," says Phil Gregory of Cotchett, Pitre & McCarthy, who is representing Sutardja and Dai. "This whole case is about Goldman trying to make Goldman look better, and my clients suffering for it."
The couple allege that in January 2008 Goldman removed Sutardja and Dai from the ownership records of 20,000,000 shares of Marvell stock the couple held in a Goldman brokerage account. The couple say they agreed to allow Goldman to add the firm's name to the stock ownership records, but that the shares were supposed to classified as held for the benefit of either Sutardja or Dai. Instead, the couple say their names were removed completely.
They state that by putting their shares in Goldman's name, the firm was able to lend those shares to short sellers, allowing them to increase their bets against Marvell.
"Goldman Sachs has consistently denied and continues to fight Dr. Sutardja and Ms. Dai's claims, which are currently in arbitration with FINRA," says a Goldman spokeswoman. "We have not seen any new claims."
In 2008, Marvell Technology paid a $10 million fine to settle allegations from the Â鶹´«Ã½ and Exchange Commission that the company backdated the options it paid out to its executives. As part of the settlement, Dai paid a personal fine of $500,000 and was barred from being a director of a publicly traded company for five years.
Married couple Sehat Sutardja and Weili Dai, co-founders and executives of the semiconductor company Marvell Technologies, say the Wall Street firm mislabeled shares in the couple's brokerage account in order to be able to assist short-sellers who were betting against the company the couple founded.
"Goldman had no legal right to lend out shares that didn't belong to the firm," says Phil Gregory of Cotchett, Pitre & McCarthy, who is representing Sutardja and Dai. "This whole case is about Goldman trying to make Goldman look better, and my clients suffering for it."
The couple allege that in January 2008 Goldman removed Sutardja and Dai from the ownership records of 20,000,000 shares of Marvell stock the couple held in a Goldman brokerage account. The couple say they agreed to allow Goldman to add the firm's name to the stock ownership records, but that the shares were supposed to classified as held for the benefit of either Sutardja or Dai. Instead, the couple say their names were removed completely.
They state that by putting their shares in Goldman's name, the firm was able to lend those shares to short sellers, allowing them to increase their bets against Marvell.
"Goldman Sachs has consistently denied and continues to fight Dr. Sutardja and Ms. Dai's claims, which are currently in arbitration with FINRA," says a Goldman spokeswoman. "We have not seen any new claims."
In 2008, Marvell Technology paid a $10 million fine to settle allegations from the Â鶹´«Ã½ and Exchange Commission that the company backdated the options it paid out to its executives. As part of the settlement, Dai paid a personal fine of $500,000 and was barred from being a director of a publicly traded company for five years.
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