LOS ANGELES, April 18, 2008 (Lawfuel) — Notice is hereby given
that Glancy Binkow & Goldberg LLP has filed a Class Action lawsuit in
the United States District Court for the Southern District of New York
on behalf of a class (the “Class”) consisting of all persons or
entities who purchased and/or repurchased auction rate securities
offered for sale by The Goldman Sachs Group, Inc. (NYSE:GS), and its
principal U.S. broker-dealer, Goldman, Sachs & Co. (collectively,
“Goldman Sachs”) between March 25, 2003 and February 13, 2008,
inclusive (the “Class Period”).
A copy of the Complaint is available from the court or from Glancy
Binkow & Goldberg LLP. Please contact us by phone to discuss this
action or to obtain a copy of the Complaint at (310) 201-9150 or Toll
Free at (888) 773-9224, by email at info@glancylaw.com, or visit our
website at www.glancylaw.com.
On April 18, The New York Times reported that New York Attorney General
Andrew M. Cuomo is investigating how auction rate securities were
marketed to municipalities and public entities, and his office has
subpoenaed 18 banks that underwrote and brokered auction rate
securities, including Goldman Sachs Group, Inc. In addition, securities
regulators from nine other states have formed a task force
investigating how banks disclosed the risks of auction failures to
investors, and the Financial Industry Regulatory Authority, working
with the Securities and Exchange Commission, has initiated an inquiry
into sales practices in the auction rate securities industry.
The Complaint charges Goldman Sachs with violations of federal
securities laws. Among other things, plaintiff claims that defendants’
material omissions and dissemination of materially false and misleading
statements concerning auction rate securities caused those securities
to be overvalued and artificially inflated, inflicting damages on
investors. Goldman Sachs provides investment banking, securities, and
investment management services to corporations, financial institutions,
governments and high-net-worth individuals worldwide. The Complaint
alleges that defendants represented to investors that auction rate
securities (also known as auction rate preferred stock, variable rate
preferred securities, money market preferred securities, periodic
auction rate securities and auction rate bonds) were equivalent to cash
or money market funds, and highly liquid investments suitable for
short-term investing. Defendants knew, but failed to disclose to
investors, material facts about auction rate securities. Specifically,
the Complaint alleges that defendants failed to disclose: (i) that
auction rate securities were not cash alternatives, but actually were
complex, long-term financial instruments with 30-year maturity dates or
no maturity at all; (ii) that auction rate securities were only liquid
at the time of sale because the auction market was artificially
supported and manipulated by various broker-dealers to maintain the
appearance of liquidity and stability; and (iii) that auction rate
securities would become illiquid as soon as the broker-dealers stopped
maintaining the auction market.
On February 13, 2008, approximately 87% of all auctions of auction rate
securities failed when all major broker-dealers refused to continue to
support the auctions. As a result of the withdrawal of support by all
of the major broker-dealers, the market for auction rate securities
collapsed, leaving the holders of these auction rate securities with no
commercially reasonable means of liquidating the investments defendants
offered and sold as a suitable alternative to money market funds and
other short-term cash management vehicles.
On April 9, 2008, in a 10-Q filing with the SEC, Goldman Sachs
acknowledged it has received requests for information from “various
governmental agencies and self-regulatory organizations relating to
certain auction products…and the related recent failure of such
auctions.” The New York Attorney General also is investigating how
banks brokered auction rate securities and how they decided to allow
some auctions to fail in February while supporting others.
Plaintiff seeks to recover damages on behalf of Class members and is
represented by Glancy Binkow & Goldberg LLP, a law firm with
significant experience in prosecuting class actions, and substantial
expertise in actions involving corporate fraud.
If you are a member of the Class described above, you may move the
Court, not later than June 17, 2008, to serve as lead plaintiff,
however, you must meet certain legal requirements. If you wish to
discuss this action or have any questions concerning this Notice or
your rights or interests with respect to these matters, please contact
Lionel Z. Glancy, Esquire, of Glancy Binkow & Goldberg LLP, 1801 Avenue
of the Stars, Suite 311, Los Angeles, California 90067, by telephone at
(310) 201-9150 or Toll Free at (888) 773-9224 or by e-mail to
info@glancylaw.com.
