Goldman Sachs tells SEC it expects more legal battles on CDOs

Goldman Sachs expects more litigation over its collateralized debt obligations, the bank told the SEC on Monday.

The bank is already facing federal civil fraud charges and a criminal investigation, but it made it clear in a filing with the Securities and Exchange Commission that its legal battles are far from over.

“We anticipate that additional putative shareholder derivative actions and other litigation may be filed, and regulatory and other investigations and actions commenced, against us with respect to offerings of CDOs,” the company said Monday in a filing with the Securities and Exchange Commission. 

The SEC has filed a civil lawsuit alleging Fabrice Tourre misled investors in mortgage-related securities about the role that a hedge fund, Paulson & Co., played in selecting and betting against the transaction. 

During hearings before a Senate subcommittee, Goldman executives, including CEO Lloyd Blankfein, denied any wrongdoing. 

Sen. Carl Levin (D-Mich.) said Goldman made nearly $4 billion from betting against the mortgage market. During almost 11 hours of testimony, Levin pressed executives for answers on why they took the positions they did. 

Before the hearings, the committee released e-mails obtained from Goldman Sachs with employees calling some of the investments “junk.” 

Shareholders reelected Blankfein on Friday with more than 95 percent of the vote, according to preliminary results. 

To see the full SEC filing, click here.