Goldman Sachs Group Inc. was sued by three former female employees who claim they faced discrimination in pay and fewer opportunities for promotion than men at the firm.
“The violations of its female employees’ rights are systemic, are based upon companywide policies and practices, and are the result of unchecked gender bias that pervades Goldman Sachs’s corporate culture,” the women said in a complaint filed in federal court in Manhattan yesterday.
H. Cristina Chen-Oster, a former vice president; Lisa Parisi, a former managing director; and Shanna Orlich, a former associate, seek to represent all female Goldman employees with those job titles.
The women seek unspecified damages and a court order requiring Goldman Sachs to remedy the “systemic sex discrimination” at the firm, according to the complaint.
“We believe this suit is without merit,” said Lucas van Praag, a Goldman spokesman. “People are critical to our business, and we make extraordinary efforts to recruit, develop and retain outstanding women professionals.”
The case is Chen-Oster v. Goldman, Sachs & Co., 10cv6950, U.S. District Court, Southern District of New York (Manhattan).
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Lehman Sues CIBC, Says Claim Change Cost $3 Billion
Lehman Brothers Holdings Inc. and its creditors were deprived of more than $3 billion they were due to receive from collateralized debt obligation deals because its claims lost priority as a result of its bankruptcy filing two years ago, the bank said in a lawsuit.
Lehman sued to recover $1.3 billion it claims it was owed by the Canadian Imperial Bank of Commerce in connection with one of the biggest of the 43 CDO deals it was involved in.
Lehman is “entitled to a declaration that the purported termination of the note purchase agreement was null and void and CIBC’s obligation to pay amounts due” remains in force and effect, the company said in court documents filed Sept. 14 in U.S. Bankruptcy Court in Manhattan.
The former investment bank, whose bankruptcy was the biggest in U.S. history with assets of $639 billion, has said creditors may have to wait years to recover about 15 cents to 44 cents on the dollar. Any money from lawsuits would swell those amounts. Filing several lawsuits yesterday over the change in claims priorities, the bank beat the two-year deadline for so- called fraudulent-transfer suits.
Lehman, based in New York, said it had contracts giving it senior payment priority in derivative deals, which were replaced with junior payment priority after the bank filed for bankruptcy protection. The flip was improper, Lehman said in suing the U.S. Bank National Association, Deutsche Bank AG’s trust unit and dozens of companies that issued notes.
In the CDO deals, Lehman’s right to priority payment was replaced by noteholders, who received proceeds from the swap agreements, Lehman said.
Canadian Imperial, based in Toronto, said the matter is not new and has been disclosed in earnings statements since the fourth quarter of 2009. The Toronto-based bank had a C$895 million ($869 million) gain in the fourth quarter of 2008 from the reduction of an unfunded commitment on a note issued by a CDO. Lehman was a guarantor of a related credit default swap agreement with that CDO, according to Canadian Imperial statements.
“We continue to believe that the CDO indenture trustee’s actions were fully supported by the terms of the governing contracts and the relevant legal standards,” the bank said in a statement yesterday.
The Chapter 11 case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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Two Iowa Egg Farms Are Sued Over Salmonella Outbreak
People from six U.S. states sued two Iowa egg farms, accusing them of failing to prevent an outbreak of salmonella poisoning.
The federal Centers for Disease Control and Prevention has said that as many as 1,519 diagnosed case reported since May 1 may be linked to eggs from the Wright County Egg farm in Galt and Hillandale Farms of Iowa in New Hampton.
“Self-policing doesn’t work,” Kenneth Moll, a lawyer for the consumers, said yesterday at a press conference announcing the suit was filed in federal court in Chicago. The farms failed to follow U.S. regulations to prevent contamination, he said.
Wright, the trade name for Quality Egg LLC, and Hillandale have recalled 550 million eggs since the outbreak was detected. It is the largest instance of salmonella poisoning since the Atlanta-based CDC began tracking cases more than 30 years ago.
Salmonella can cause fever, abdominal cramps and severe diarrhea. It can lead to fatal complications in infants, the elderly and people with weakened immune systems.
Hinda Mitchell, an outside spokeswoman for Wright County Egg, didn’t immediately reply to a voice-mail message seeking comment. Hillandale’s outside spokeswoman, Julie DeYoung, also didn’t immediately return a call seeking comment.
The case is Dwyer v. Quality Egg LLC, 10-cv-05847, U.S. District Court, Northern District of Illinois (Chicago).
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Soros Insider Trading Case to Be Reviewed by Court
Billionaire investor George Soros won a bid to have the European Court of Human Rights review his French insider-trading conviction from 2002, one of his lawyers said yesterday.
The court notified Soros it will rule on the complaint without a hearing, based on submissions by the parties, Ron Soffer, a Paris-based attorney, said in a telephone interview.
“We hope that the court will issue a final ruling in the same spirit and are certain that the conviction will be overturned as a result,” said Soffer, who’s working with London lawyer Anthony Lester, on the complaint.
Soros, 80, was convicted of insider trading and ordered to repay 2.2 million euros ($2.9 million) he’d made from a 1988 purchase of Societe Generale SA shares after a Paris court found he’d acted with the knowledge that the bank might be a takeover target.
Soros turned to the human rights tribunal after he lost his appeal to Cour de Cassation, France’s highest appeals court, which quashed the fine while upholding the conviction.
French stock market regulators didn’t pursue Soros, saying insider trading laws were too vague to determine whether he’d broken them.
Toyota Urges U.S. Judge to Throw Out Lawsuits Over Acceleration
Toyota Motor Corp. urged a U.S. judge to dismiss lawsuits over sudden acceleration claims saying they’re based on anecdotes and fail to identify any specific defects in the vehicles.
Toyota, the world’s largest automaker, faces more than 300 federal and state lawsuits including proposed class actions over economic losses and claims of personal injuries or deaths related to allegations the vehicles suddenly accelerated and couldn’t be stopped.
“Plaintiffs infer negligence and strict liability on the part of Toyota based on unsubstantiated circumstantial information,” the automaker said in papers filed in federal court in Santa Ana, California, Sept. 13.
The automaker, based in Toyota City, Japan, has recalled more than 8 million vehicles worldwide in the past year for defects including pedals that stuck or snagged on floor mats.
A hearing on Toyota’s request to dismiss the lawsuits is scheduled for Nov. 19 in Santa Ana.
Shiori Hashimoto, a spokeswoman for the automaker in Tokyo couldn’t immediately comment on the papers.
The consumer cases are combined as In re Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices and Products Liability Litigation, 8:10-ml-02151, U.S. District Court, Central District of California (Santa Ana).
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Father-Son Developers Hid Assets in ‘Web of Lies,’ U.S. Says
A father and son who built hotels used a “web of lies” to hide income and assets including Miami Beach mansions, luxury cars, a yacht and a helicopter from U.S. tax authorities, a Florida federal prosecutor told jurors.
Mauricio Cohen Assor, 77, and his son, Leon Cohen Levy, 46, concealed their wealth behind nominee owners of companies in tax havens while reporting annual income of no more than about $46,000 a year, Assistant U.S. Attorney Jeffrey Neiman said yesterday in federal court in Fort Lauderdale, Florida.
“This is a case of greed, deception and manipulation,” Neiman said at the start of the trial. The men cheated the U.S. Internal Revenue Service “through a web of lies, forged documents and false statements,” he said.
An attorney for Cohen Assor and his son countered that the evidence will show that the men never thought they broke the law. He denied charges that they hid ownership of one Miami Beach home valued at $26 million and another worth $20 million, and that they failed to declare $45 million in investments, commercial properties worth $55 million and cars including a Rolls-Royce Phantom and a Porsche Carrera GT.
Michael Pasano, a defense attorney, said foreign companies employing the men owned the assets, and they paid taxes on their income. They were “idea-rich but cash- and asset-poor” while helping other people make money, Pasano said in his opening statement. One owner of their companies was Cohen Assor’s brother-in-law in Venezuela, Pasano said.
The case is USA v. Assor, 10-cr-60159, U.S. District Court, Southern District of Florida (Fort Lauderdale).
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Shapiro Pleads Guilty in $880 Million Ponzi Scheme
Nevin Shapiro, the former owner of Capitol Investments USA Inc. and a booster of college athletics, pleaded guilty to running an $880 million Ponzi scheme.
Shapiro, 41, of Miami Beach, Florida, admitted yesterday in Newark, New Jersey, federal court that he defrauded more than 50 investors who lost between $50 million and $100 million in his bogus wholesale-grocery distribution business. He said he used new investors’ money to pay earlier ones, as well as to fund a lavish lifestyle.
Shapiro admitted to stealing $35 million to pay illegal gambling debts, make mortgage payments on a $5 million house, and buy floor seats to Miami Heat basketball games. Shapiro, who gave $150,000 to the University of Miami for an athletic lounge, said he gave cash or gifts to dozens of student-athletes.
The criminal case is U.S. v. Shapiro, 10-cr-00471, U.S. District Court, District of New Jersey (Newark). The SEC case is Securities and Exchange Commission v. Shapiro, 10-cv-21281, U.S. District Court, Southern District of Florida (Miami).
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Coffey Won’t Return to Law After Electoral Defeat
Sean Coffey, the lawyer who won more than $6.15 billion in settlements for WorldCom Inc. investors, has no plans to return to practicing law after his defeat in a run for New York Attorney General.
“I’m retired from the practice of law,” Coffey, 54, said in a phone interview yesterday. “I don’t see returning to practicing law, certainly in the near term.”
Coffey came in third in the Sept. 14 Democratic primary for the state’s top lawyer job with 16 percent of the vote, based on 98 percent of precincts reporting, behind winner Eric T. Schneiderman and Kathleen Rice, according to the New York Times.
Coffey, a former partner at New York’s Bernstein Litowitz Berger & Grossmann LLP, which represents investors in securities-fraud lawsuits against companies, won the WorldCom settlements in 2004 and 2005 following a collapse of the company linked to accounting fraud. A novel settlement with WorldCom’s former directors required them to pay a portion, a precedent that reverberated in boardrooms nationwide.
Coffey left Bernstein Litowitz in October to run for public office for the first time, seeking to succeed Andrew Cuomo, who is running for governor.
Coffey said he may teach law as an adjunct professor, and is considering writing an article about his 11 months running for office, for which he kept a diary. He said he also hopes to do some traveling with his family.
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