Goldman Sachs Sued, H&R Block Settles, Munis: Compliance

By Ellen Rosen

(Adds Reverse Mergers in Compliance Policy and Rajaratnam in Courts.)

Aug. 10 (Bloomberg) — The National Credit Union Administration has sued Goldman Sachs Group Inc., accusing the Wall Street firm of violating federal and state laws in the sale of securities to now-failed corporate credit unions.

NCUA is seeking damages in excess of $491 million from Goldman Sachs in the lawsuit filed yesterday in California. The suit is the fourth in a series aimed at recovering almost $2 billion from “sellers and underwriters of questionable securities,” NCUA said in a statement yesterday announcing the suit.

Stephen Cohen, a spokesman for New York-based Goldman Sachs, declined to comment on the NCUA lawsuit.

NCUA claims that Goldman Sachs misrepresented securities in offering documents, causing the credit unions to believe the risk of loss was minimal when in fact it was substantial, according to its statement. The regulator previously filed a complaint against JPMorgan Chase & Co. and two against Royal Bank of Scotland Group Plc.