Goldman Sachs Wins Dismissal In Lawsuit Over Billions Of Dollars In Bonuses

Goldman Sachs Group Inc's board of directors has won the dismissal of a lawsuit seeking to recover billions of dollars of bonus payouts and other compensation awarded for 2009.

The January 2010 lawsuit said Goldman's policy of targeting a payout of close to 50 percent of net revenue as compensation reflected a "complete breakdown" of oversight that showed "scant regard" for shareholder interests.

According to its annual report for that year, Goldman ultimately paid out $16.19 billion in compensation and benefits for 2009, or 35.8 percent of its net revenue of $45.17 billion, its lowest percentage payout as a public company.

In his ruling, Justice Bernard Fried dismissed the lawsuit with prejudice, saying the allegations "do not provide any basis for the conclusion that the board acted for any purpose other than the advancement of the company's interests."

The lawsuit combined cases brought by Illinois' Central Laborers Pension Fund and an individual plaintiff, Ken Brown.

Deborah Elman, a lawyer for the fund, did not immediately return a call seeking comment. Lynda Grant, a lawyer for Brown, said, "We're disappointed with the decision and don't agree with it." Goldman spokesman Michael DuVally declined to comment.

The case is Central Laborers' Pension Fund v. Blankfein et al, New York State Supreme Court, New York County, No. 600036/2010.

(Reporting by Jonathan Stempel in New York; editing by John Wallace)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[castlemike]

06:29 PM on 09/27/2011

So does that mean FAS 157 will be repealed and Glass Stegall reinstated?

[Kai-HK]

09:59 PM on 09/27/2011

Why? How would Glass-Steagall have prevented the the Housing Crises?
How come many advanced countries that do not have Glass-Steagall type of regulations not have a Housing Crisis?

[castlemike]

10:46 AM on 09/28/2011

http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Act

[Zip Zinzel]

11:17 PM on 09/28/2011

Great Post
Yes go back to mark to market

[tuberider]

06:04 PM on 09/27/2011

Of course everybody but the Regulators predicted this outcome on the day the investigation was announced. We should just cut the cards and let the clowns pull the proverbial ace out of their sleeves like Bullwinkle. More dough for junkets for the dopes!

[screedslinger]

11:10 AM on 09/27/2011

We used to complain--and rightly so!--that the law recognized the interests of shareholders, but not the interests of stakeholders (workers, factory towns, people who eat and breath and drink facotry waste, etc.) Now it is clear that the situation is even worse than we thought. Piss-ant working stiff shareholders mean jack. It's the TOP TIER of shareholders--the CEO, the Board, the hedgefunds--that matter to the law. And everyone else be damned. Every right-wing judge in office now should be impeached, tarred and feathered.

[muck-raker]

10:52 AM on 09/27/2011

So, the Treasury prints US Treasure Bonds/Bills/Notes. This is debt. This is a loan. This is an IOU from Uncle Sam.
People in the private sector can go direct to treasury and buy bonds as an investment. Some consider these investments "safe" because this debt is backed by the faith and credit of the US government.

When the government can’t fund its programs with private debt buyers, it walks down the street to the Federal Reserve. In overly simplified term, the government sells its US Treasury debt to the Fed when nobody else wants to buy it. The Fed writes the government a check for billions of dollars with "money" it just creates literally out of thin air. It clicks a few buttons on a computer and expands its balance sheet. This mean that they make one of their account numbers bigger, but there are no real assets that back it. You and I would go to jail for writing a check from an account we just make up, but Congress wants the Fed to do this so they can fund their programs, so it is legal. It is counterfeiting, but it is "legal".

To recap...The Fed creates money (literally out of thin air) to purchase assets from private dealers (usually Treasuries, but can be any asset) by writing the dealers a check drawn on the Fed itself. The dealer deposits the newly created money in the bank and money enters the economy. Magic.

[nomadicexpat]

01:40 AM on 09/28/2011

nice try, but the whole world still wants to buy US Treasuries hence they have the lowest yields ever. if people didn't want them, the yields would rise and prices would fall.

[EncourgingDebate]

05:21 AM on 09/28/2011

LOL, the United States Government has become the Nations Biggest MAFIA family around !

Don't take my word for it, just THINK, outside your little box and you'll see it too !

The ATF and Treasury service sure learned how to win by taking lessons from the MOB.

[muck-raker]

10:43 AM on 09/27/2011

“excerpt: Goldman argued they didn't need government supervisio­­­n for simple reason: Rooting out fraud was in their own self-inter­­­est. In event of financial wrongdoing­­­, they would do their civic duty and protect markets. well before many of other players on Wall Street realized what was going on, top dogs at Goldman — — started to fear they were sitting on time bomb of billions in toxic assets. Yet instead of sounding alarm, first thing Goldman did was tell no one. second thing was figure out way to make money on knowledge by screwing its own clients. So not only did Goldman throw a full-blown "bite me" on its own self-right­­­eous horsechit about "internal risk management­­­," it instantly sped way beyond inaction straight into craven manipulati­­­on.

. Spitzer, as NY attorney general. "Their whole political argument for decade was 'Leave us alone, trust us to regulate ourselves.­­­' They not only abdicated responsibi­­­lity, they affirmativ­­­ely traded against entire market. other words, the bank needed to find suckers to buy much of risky inventory as possible. Goldman was like car dealership that realized it had whole lot full of cars with faulty brakes. Instead of announcing recall, it surged ahead with a two-fold plan to make fortune: first, by dumping dangerous products on other people, and second, by taking out life insurance against fools who bought the deadly cars.
more great short read: http://www­­­.rolling­s­t­one.co­m/­po­liti­cs/­new­s/­the-­peop­­le-vs­-gol­d­man-­sac­hs-­201­10­511?p­ag­e­=3””
Sha”

[Billy Jack]

08:51 AM on 09/27/2011

Take down GS

[screedslinger]

10:43 AM on 09/27/2011

Fanned and faved!

[AZreb]

08:45 AM on 09/27/2011

Move along, folks - nothing new to see here. Next step will be a call for another bail-out for the big financial institutions. Too Big To Fail and the crooks are Too Rich To Jail.

[screedslinger]

10:44 AM on 09/27/2011

And the judicial system has been so overstuffed with far-right cogs for so long, that this decision is just par for the course. Gag.

[Kai-HK]

10:01 PM on 09/27/2011

'Too Big To Fail and the crooks are Too Rich To Jail.'

Do you mean Big Green, or Big Public Union Post Office, Big Freddie?

[walstir]

03:37 AM on 09/27/2011

So, the employees who generated the net revenue to begin with got about a third of the money and the government and stockholders such as the Illinois' Central Laborers Pension Fund divided up the other two thirds. I wonder if the laborers would equally pleased to see more of the net revenue of the organizations where they work themselves go to the stockholders rather than the employees.

[screedslinger]

10:58 AM on 09/27/2011

The question here is HOW did the employees generate the revenue? And which employees got the real rewards? Who got the multi-million-dollar bonuses? And where did the money come from? If it was in reward for writing more CDOs and useless derivatives--the kind of Wunderkind feces that brought on this crisis in the first place--and the money came from the taxpayers, not from real wealth created--then you bet your sweet backside we the taxpayers have a right to resent the share sequestered by the tradesters and speculators (to the call them "employees," as though they punched a clock and lived just a little above the level of their secretaries, is a sick euphemism in this context).

[walstir]

05:18 AM on 09/28/2011

Employees don't necessarily punch time clocks. Warren Buffett is an employee of Berkshire Hathaway as well as being part owner - just like the cashier in a grocery co-op. Derivatives are a zero-sum instrument; so being worthless for one of the parties is a design feature and the reason that they are entered into in the first place. The Illinois' Central Laborers Pension Fund suit wasn't questioning the source of Goldman's revenue - only that they should be getting more of the firm's revenue and the staff (if you prefer that term) should be getting less.

[loki]

01:20 AM on 09/27/2011

wow, theres a shocker.

[screedslinger]

10:59 AM on 09/27/2011

Fanned, faved. Your byline "Tired of being spit on by the Ivy greed capitalist" really says it all.

[teachone]

10:54 PM on 09/26/2011

The United States legal system, judges, and supreme court need to be overhauled and most replaced! I am so SICK of republicans/teapartiers/big business/filthy wealthy/wallstreet/corrupt in government getting away with breaking the laws in this country!!! They are the reason for the level of corruption in this country, they are enabling those listed above and should be held accountable, as these individuals should be, for bending the law in order to "get their way and promote their own agenda"! The law is there to support fairness and honesty, not corruption and lies!!! I have seen five of my ex employers lie their heads off and break the law in their conduct and not one person was held accountable, but simply did whatever they wanted, then knew someone in our judicial system or lied and so were not held accountable for their actions!!! I know in time God will return tenfold to these individuals what they did to me, but it is still ABSOLUTELY WRONG for people to be allowed to get away with such! I don't care who they are, how much money or power they have or who they know!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[screedslinger]

11:04 AM on 09/27/2011

Amen, TeachOne. You are one of the ones who actually get what's going on. Whatever it once was, the law in the U.S. has become yet another tool of the oligarchs. Why do the re-wrtie regulations, instead of simply erasing them? To make entry into the industry too expensive for newcomers, of course. Why is Clarnece Thomas' wife a registered lobbyist who earns big bucks lobbying for corporations? Because she and her husband are on the same page, only he is an "impartial" judge whom we are supposed to revere. I'll hold back the expletives. But these judges deserve respect about as much as the material a rancher scrapes off of his boots every day after work.

[tuberider]

06:29 PM on 09/27/2011

If you hadn't forgotten the entrenched, corrupt Democratic Party political elite you'd be 100% right!

[kamact]

10:45 PM on 09/26/2011

This justice is also bought off,...our government will not act,...which means the Too-Many-To-Ignore will have to directly inflict massive justice on these TBTF banksters and their government agents

[screedslinger]

11:06 AM on 09/27/2011

Fanned, faved. You know what's going on, my friend. I went to law school, and when I saw what the far-right-stuffed courts have done to our law in the last 40 years, I realized there was literally nothing I could do to help normal people within our existing legal system. So I went back to teaching. These guys are evil, plane and simple.

[tuberider]

06:31 PM on 09/27/2011

"plain and simple'', but you were perfectly clear...

[marinatha]

10:38 PM on 09/26/2011

This out come was so EXPECTED...... .Maybe someone will do something to advance the Am.public as a country.

[PilgrimMom]

05:20 PM on 09/26/2011

Another branch of government got Lloyd's memo...

[TheBluesGuy]

05:14 PM on 09/26/2011

We need to get used to this. Corporations Boards, their CEOs, their managers can't be held to the obvious standard of protecting the shareholder's interests. And, they can't be expected to pay taxes, either. But their ability to contribute to political campaigns can't be compromised and is without limits.

The next couple of decades will be ugly in this country.