Goldman Sachs employee denies fraud

Goldman Sachs continues to hog the media spotlight for the wrong reasons according to a report in the New York Times.

Goldman Sachs continues to hog the media spotlight for the wrong reasons according to a report in the New York Times.

Just days after the investment bank agreed to pay $550 million to settle securities fraud claims, one of its estranged employees, and the only one named in the case, has filed a lengthy reply denying the charges and seeking dismissal of the case.

The employee, Fabrice Tourre, has been on paid leave from Goldman Sachs since the case was filed in April this year. Tourre is accused of making “misleading statements to investors” and the Securities and Exchange Commission is seeking a penalty and an injunction that would bar him from working within the financial services industry.

As the NYT points out, regardless of the outcome, the conclusion of this case is potentially problematic for the Goldman: “If he [Tourre] pays a big fine in a settlement or loses the case, it could be viewed as confirmation that there was wrongdoing. If he wins in court, some Goldman shareholders may wonder why the bank paid a big fine in the case. Either way, a drawn out trial would keep the company's actions in the spotlight.”

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