Grant & Eisenhofer Files Derivative Suit Challenging Goldman Bonuses

By Andrew Longstreth
AmLawLitigationDaily, December 14, 2009

In the five weeks since Goldman Sachs chief Lloyd Blankfein made his spectacularly insensitive comment about doing “God’s work,” the company has been trying to quell the public uproar about bankers’ compensation. Last week, for example, Goldman announced that its top executives would receive no cash bonuses for 2009.

But that move didn’t dissuade Grant & Eisenhofer from proceeding with a derivative suit against Goldman executives, brought on behalf of the Security Police and Fire Professionals of America Retirement Fund. In the suit, filed in New York state court Monday, Grant & Eisenhofer alleges that Goldman directors breached their fiduciary duty by overseeing a pay system that’s not in the best interests of shareholders. According to the complaint, Goldman is on pace to set aside more than $22 billion–a record amount–for 2009 bonuses, even though its workers didn’t merit them.

“Goldman’s success this year has not been the product of the skill and business acumen of the company’s employees, but is attributable directly to the multitrillion-dollar infusion of capital by the American taxpayers to bail out the entire financial services industry–including Goldman Sachs itself,” Grant & Eisenhofer lawyers state in the complaint.

Goldman has long had a policy of paying out nearly half of its net revenue to employees in bonuses, according to the suit. Jay Eisenhofer told the Litigation Daily that such a policy doesn’t make sense for shareholders, despite Goldman’s claims that it’s necessary to attract the best and the brightest bankers. “How do they know they can’t attract the best and brightest [by setting aside] 39 percent of net revenues or 35 percent?” said Eisenhofer. “They didn’t try to figure that out.”

The suit seeks restitution from 14 individual defendants and an unspecified amount of damages. It also seeks an opportunity for shareholders to vote on a proposal to shore up the board’s oversight of compensation.

A Goldman spokesperson told the Litigation Daily that the suit is “entirely without merit” and that the company would “contest it vigorously.” No word yet on who will defend the bank.

(The Next Front)

Obama Ordered U.S. Military Strike on Yemen Terrorists

Cruise Missiles Launched Thursday Hit Two Suspected al Qaeda Sites; Major Escalation of US Efforts Against Terrorists

By BRIAN ROSS, RICHARD ESPOSITO, MATTHEW COLE, LUIS MARTINEZ and KIRIT RADIA

December 18, 2009 ABC News

On orders from President Barack Obama, the U.S. military launched cruise missiles early Thursday against two suspected al-Qaeda sites in Yemen, administration officials told ABC News in a report broadcast on ABC World News with Charles Gibson.

One of the targeted sites was a suspected al Qaeda training camp north of the capitol, Sanaa, and the second target was a location where officials said “an imminent attack against a U.S. asset was being planned.”

The Yemen attacks by the U.S. military represent a major escalation of the Obama administration’s campaign against al Qaeda.

In his speech about added troops for Afghanistan earlier this month, President Obama made a brief reference to Yemen, saying, “Where al Qaeda and its allies attempt to establish a foothold — whether in Somalia or Yemen or elsewhere — they must be confronted by growing pressure and strong partnerships.”

Until tonight, American officials had hedged about any U.S. role in the strikes against Yemen and news reports from Yemen attributed the attacks to the Yemen Air Force….

keep reading at ABC News

And a Merry Christmas to all?

[Or, history of “The War on the War on Christmas.”]

“Instead of looking forward to Christmas, it is a spirit of inquiry as to how far we can go at Christmas. We are asking whether we dare, as Christians in a Christian land, whisper the Name that gives Christmas its meaning. That is, the Christians are doing the Christmas asking early this year. Christian teachers want to know if they will be discharged if they give their classes a bit of Christmas flavor, as all our teachers gave us when we were young. The contrast between the schools which we of the mature generation attended when we were young, and the schools of today whose pupils are carefully screened from the fact that Christmas celebrates Christ, is such a contrast as ought to give mature Americans a pause. …”

–Henry Ford, in The International Jew, 1920. More here.

re "Church consistent on choosing life"

Letter sent to the Inquirer, 12/19/09:

Whether or not the Catholic Church has been consistent (Letters, 12/19) is hardly relevant to whether it demands that Catholic legislators enforce its teachings on other faiths. While there are many who believe that abortion is mainly an issue of personal choice, for some, abortion is actually required in specific cases as a measure of religious necessity. Jews, for instance, believe that — when the life or health of the mother would be injured by childbirth — that an abortion is required, that the mother takes precedence over the potential life of the fetus, and that a mother does not sin by celebrating the joys of marriage. The Catholic view, that the fetus’s life or health takes precedence over that of the sinful mother, is a matter of faith, but it is not a matter of universal morals. Elected representatives, who happens to be Catholic, have a duty of faith to purify their own lives; but they have a constitutional responsibility to protect freedom of religion for constituents whose faith differs from their own. The insistence of the Catholic Church — and other faiths who agree with them on abortion — to coerce their beliefs on others, has led in the extreme to the intimidation and murder of doctors and hospitals, and to the closing of maternity wards throughout the country. Church consistency is hardly the issue at hand. It is its intolerance for other beliefs, which over the centuries has brought expulsion, torture, inquisition, and holocaust, against its neighbors, for the crime of believing differently.

Ben Burrows
Elkins Park