Shareholders launch lawsuits against Goldman Sachs

Shareholders have filed a series of lawsuits against the bank accusing it of mismanagement.

In a filing by the bank with US regulator the Securities and Exchange Commission (SEC), shareholders have called on the bank to pay compensation and begin corporate governance reforms. The shareholders accused Goldman of failing to implement proper risk management procedures in relation to complex mortgage-backed derivatives, which went on to lose investors money. They added that the bank should have made more facts publicly available.

The news is the latest in a series of blows for the public image of the Wall Street giant. Last week reports emerged that US prosecutors are reviewing the evidence gathered by the SEC about Goldman Sachs in its recent probe into the investment bank's handling of a controversial financial product. The SEC says that Goldman misled two derivatives investors about the role played by US hedge fund Paulson, who were betting against the mortgage market, and failed to disclose a conflict of interest. Chief executive officer Lloyd C. Blankfein appeared before a US Senate panel in late April to answer questions in connection with the matter. Goldman has refused to comment on the shareholder lawsuits.