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Goldman Sachs Accused by Marvell Founders of Margin Call Fraud

Goldman Sachs Group Inc. was sued by two co-founders of Marvell Technology Group Ltd. who allege the investment bank tricked them into selling company shares by claiming the sale was needed to cover a margin loan.

Sehat Sutardja, Marvell’s chief executive officer, and Weili Dai, the company’s former chief operating officer, said they were duped into selling shares in 2008 that are now worth $141.5 million, according to a complaint filed yesterday in state court in San Francisco. Goldman Sachs pressured them by claiming a regulatory rule, which didn’t exist, required them to sell their stock, according to the complaint. Goldman Sachs held millions of shares of Marvell stock in 2008, they said.