Goldman Execs Win Dismissal of Shareholder Lawsuit


Goldman Sachs Group Inc officials won the dismissal of a shareholder lawsuit accusing them of breaching their fiduciary duties by failing to comply with terms of a federal bailout, letting workers engage in "robo-signing," and causing the bank to package troubled loans into mortgage securities.

U.S. District Judge William Pauley in Manhattan said on Tuesday the plaintiffs failed to show that Goldman executives and directors, including Chief Executive Lloyd Blankfein, acted in bad faith in leaving the federal Troubled Asset Relief Program in June 2009, and freeing the firm from restrictions on executive pay.

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Pauley also said the plaintiffs failed to present enough evidence of "red flags" to suggest that directors should have recognized deficiencies in Goldman's mortgage servicing and securitization operations.