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In the news release, Founders of Marvell Technology Group Are Among the Largest Victims of Greed at Goldman Sachs, issued
19-Mar-2012 by Cotchett, Pitre & McCarthy, LLP over PR Newswire, the source should be Cotchett, Pitre & McCarthy, LLP, rather than Marvell Technology Group as originally issued. The complete, corrected release follows:
Founders of Marvell Technology Group Are Among the Largest Victims of Greed at Goldman Sachs
Criminal Indictment of Former Goldman Sachs Director Rajat Gupta Alleges "Scheme to Defraud"; Other Current and Former Goldman Sachs Employees Under Investigation, Including Henry King and "Mr. X"
March 19, 2012 /PRNewswire/ -- The founders of Marvell Technology Group (Nasdaq: MRVL),
Dr. Sehat Sutardja and
Ms. Weili Dai, filed a claim in the
San Francisco office of the Financial Industry Regulatory Authority (FINRA) against Goldman Sachs (NYSE: GS) and two account executives, alleging Goldman Sachs manipulated the 2008 financial crisis to defraud the two Silicon Valley executives of several hundreds of millions of dollars. At that time, Dr. Sutardja and Ms. Dai were one of Goldman's largest Private Wealth Management group clients on the West Coast.
This FINRA claim comes at a time when current and former directors and employees of Goldman Sachs are facing criminal prosecution or are under indictment, and on the heels of a scathing editorial by a former Goldman executive,
Greg Smith, alleging widespread greed and corruption at the firm. Former Goldman Sachs director
Rajat Gupta has been indicted on six counts of securities fraud and one count of conspiracy relating to insider trading. A second "insider" at Goldman Sachs,
known to date as "Mr. X," reportedly leaked tips to hedge fund manager Raj Rajaratnam. Rajaratnam was convicted of insider trading charges in May, 2011. Finally, according to
Bloomberg Businessweek, two executives of Goldman Sachs are reportedly under investigation by federal authorities:
David Loeb, a managing director of Goldman Sachs, allegedly under investigation for passing on secret information about technology companies; and
Henry King, a technology analyst at Goldman Sachs, also being investigated by the FBI for allegedly offering insider tips to hedge fund clients.
A person at Goldman Sachs was allegedly caught on a wire tap leaking secrets about Intel and Apple.
"Our clients' claims go directly to the culture of corruption at Goldman Sachs," stated
Joseph Cotchett, of Cotchett, Pitre & McCarthy, LLP, one of the attorneys for Ms. Dai and Dr. Sutardja. "Our claim clearly states Goldman Sachs put the firm's interests ahead of its clients. As a result, our clients claim they were defrauded of hundreds of millions of dollars by Goldman. We will be seeking these damages and punitive damages." This same point was made by former Goldman Sachs Executive Director
Greg Smith in his
New York Times op-ed piece.
BACKGROUND ON DAI AND SUTARDJA: Dr. Sutardja and Ms. Dai founded Marvell Technology Group, a worldwide semiconductor company in 1995. Goldman Sachs managed the IPO for Marvell and put the two executives into its Private Wealth Management Group. It is alleged that once the two executives' personal wealth was under the financial management of Goldman Sachs, the firm abused the two executives' trust, manipulated their relationship, and ultimately defrauded them of several hundreds of millions of dollars.
GOLDMAN ACCUSED OF RIPPING OFF CLIENTS: The issues raised in the FINRA Claim are the same as those discussed by former Goldman Sachs Executive Director
Greg Smith in his op-ed
"Why I Am Leaving Goldman Sachs," in the March 14, 2012 edition of the New York Times. As Smith states:
"To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world's largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for."