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Goldman Legal Woes Growing?

Monday, 3 May 2010 | 5:34 PM ET

It appears Goldman's legal woes are mounting.

In a first on CNBC interview, we spoke with Jacob Zamansky of Zamansky & Assoc. who told us he is also suing Goldman.

Ahead of the broadcast Zamansky told our producers he's bringing litigation on behalf of a group of shareholders who bought the stock between Jan 2, 2007 and April 16, 2010.

Zamanaksy’s move follows a civil suit brought by the SEC alleging Goldman fraudulently marketed a financial instrument by hiding vital information from investors, including the role that hedge fund Paulson & Co played in its creation

“They should have disclosed that Paulson selected the portfolio and was going short the positions," Zamansky tells us. "They failed to disclose to their clients that they were betting against them.”

Litigation Overhang Over Goldman?
Discussing the class action suit against Goldman, with Jacob Zamansky, Zamansky & Associates.

”Also we learned executives at the company dumped $65 million in stock before the announcement,” he adds. “They’ve got a lot of problems here.”

Whether Zamansky has a leg to stand on or not is almost beside the point. Rather it's the sheer volume of litigation Goldman may be facing that worries the desk.

In a filing with the SEC, Goldman revealed that several other shareholder suits have been filed against the firm.

The charges seek damages for "breach of fiduciary duty, corporate waste, abuse of control, mismanagement and unjust enrichment.

Goldman has vehemently denied the charges calling them "unfounded in both law and fact.”

What’s the trade?

If you want exposure to the space why not just buy Morgan Stanley, counsels Brian Kelly. It's the same business without all the litigation risk.

If you’re going long Morgan, I’d go long Goldman, counsels Tim Seymour. If the governemnt goes after one bank they’ll go after them all

Learn more about the suit filed by Jacob Zamansky of Zamansky & Assoc. Watch the video above!




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Trader disclosure: On May 3, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (GS) Call Spreads; Najarian Owns (RIMM) Call Spreads; Najarian Owns (TEX) Call Spreads; Najarian Owns (MS), Is Short (MS) Calls; Najarian Owns (JPM), Is Short (JPM) Calls; Najarian Owns (BAC), Is Short (BAC) Calls; Najarian Owns (C), Is Short (C) Calls; Najarian Owns (WFC), Is Short (WFC) Calls; Najarian Owns (AAPL), Is Short (AAPL) Calls; Najarian Owns (MMR) Call Spreads; Najarian Owns (AMZN) Call Spread; Najarian Owns (AKAM) Call Spread; Najarian Owns (CAT); Najarian Owns (C) Calls; Najarian Owns (CLF) Call Spread; Najarian Owns (F) Calls; Najarian Owns (MMR) Call Spread; Najarian Owns (MS), Is Short (MS) Calls; Najarian Owns (NSC) Calls; Najarian Owns (NRG) Calls; Najarian Owns (PFE); Najarian Owns (SOA) Call Spread; Najarian Owns (TEX) Call Spread; Najarian Owns (YHOO) Call Spread; Seymour Owns (F), (BAC), (MPEL), (DRYS);(AAPL), (MSFT); Karabell Owns (GS), (C), (AAPL), (VALE), (RIMM); Grasso Owns (NDAQ), (DYN), (LPX), (ASTM), (ABK), (BAC), (BGP), (C), (CVGI), (JPM), (NEM), (PRST), (PFE), (BA), (T), (CSCO), (X)Kelly Owns (FXE) Puts; Kelly Owns (FXB) Puts; Finerman's Firm Is Short (IYR), (MDY), (SPY); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Fim Owns (BAC), (BAC) Calls; Finerman Owns (BAC), (BAC) Preferred; Finerman Owns (GOOG); Finemran's Firm And Finerman Own (JPM); Finerman's Firm Owns (MCD); Finerman's Firm And Finerman Own (RIG), (RIG) Calls; Finerman's Firm Is Short (USO); Finerman Owns (WFC) Preferred; Finerman's Firm Owns (PLCM); Terranova Owns (SWN), (XCO), (HES), (AXP), (TER); Terranova Is Short (CMA); Terranova Owns (PFE) May Calls; Terranova Owns (C) May Calls; Terranova Is Long June Gold 2010 Futures; Cortes Is Long U.S. Dollar; Cortes Is Short Crude Oil; Cortes Is Short (IWM) On Spread vs. Long (SPY)

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