Goldman Sachs launches lawsuit against French bank, newspaper report claims

20 August 2010

Goldman Sachs has launched legal action against Natixis SA over the ending of a protection contract surrounding three derivative transactions.

According to the Financial Times (FT), the dispute is centred on the investment bank’s claim that the French financial institution is in breach of its contract if it cancels the protection.

However, Natixis stated it can terminate three credit derivative transactions as Goldman Sachs “failed to comply with instructions it gave”.

Stephenson Harwood, spokesperson for the French final institution, told the news provider: “We are preparing our defense. We are surprised that Goldman is suing us.”

In the documents presented at a high court in London, Goldman Sachs launched a claim for damages and denied it failed to follow instructions which the French bank provided when it sold the protection.

As part of the law suit, the investment bank is also seeking to show that Natixis is not allowed to end the contract.

A trial is expected to begin on September 9th, the FT reported.

In July, a division within Goldman Sachs launched legal action to overturn a $20.6 million arbitration award to creditors managing the assets of collapsed hedge fund Bayou Group.

By Jim Ottewill

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development