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Marvell Co-Founders' Suit Against Goldman Sachs

Marvell Co-Founders' Suit Against Goldman Sachs

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Published by DealBook
Marvell Technology co-founders' lawsuit against Goldman Sachs.
Marvell Technology co-founders' lawsuit against Goldman Sachs.

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Published by: DealBook on Apr 11, 2011
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01/09/2013

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COMPLAINTCASE NO.
KEKER & VAN NEST LLP
JOHN W. KEKER - #49092SUSAN J. HARRIMAN - #111703MICHAEL D. CELIO - #197998REID P. MULLEN - #270671710 Sansome StreetSan Francisco, CA 94111-1704Telephone:Facsimile: (415) 397-7188Email: jkeker@kvn.comsharriman@kvn.commcelio@kvn.comrmullen@kvn.com
COTCHETT, PITRE & MCCARTHY, LLP
JOSEPH W. COTCHETT - #36324PHILIP L. GREGORY - #95217NANCI E. NISHIMURA - #152621MARY F. MOCK - #249379San Francisco Airport Office Center 840 Malcolm Road, Suite 200Burlingame, CA 94010Telephone: (650) 697-6000Facsimile: (650) 697-0577Email: jcotchett@cpmlegal.compgregory@cpmlegal.comnnishimura@cpmlegal.commmock@cpmlegal.comAttorneys for Plaintiffs
WEILI DAI and SEHAT SUTARDJA
 
SUPERIOR COURT OF THE STATE OF CALIFORNIAIN AND FOR THE COUNTY OF SAN FRANCISCOWEILI DAI and SEHAT SUTARDJA
,Plaintiffs,v.
GOLDMAN SACHS & CO.;BRADLEY DEFOOR;GRAHAM BRANDT; andDOES 1 through 20, inclusive,
Defendants.Case No.
COMPLAINT FOR:
(1) COMMON LAW FRAUD;(2) BREACH OF FIDUCIARY DUTY;(3) VIOLATIONS OF THE CONSUMERSLEGAL REMEDIES ACT (Civ. Code § 1750et seq.); and,(4) UNFAIR COMPETITION (Bus. & Prof.Code § 17200 et seq.)
DEMAND FOR JURY TRIAL
 
 
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COMPLAINTCASE NO.
551950.01
TABLE OF CONTENTSPage
I.
INTRODUCTION ...............................................................................................................1
II.
PARTIES .............................................................................................................................6
A.
Plaintiffs ...................................................................................................................6
1.
Dr. Sehat Sutardja ........................................................................................7
2.
Weili Dai ......................................................................................................7
B.
Defendants ...............................................................................................................8
1.
Goldman Sachs & Co...................................................................................8
2.
Bradley Defoor.............................................................................................8
3.
Graham Brandt .............................................................................................8
4.
Doe Defendants ............................................................................................9
C.
Un-Named Co-Conspirators ....................................................................................9
D.
Agents And Co-Conspirators ...................................................................................9
III.
JURISDICTION AND VENUE ........................................................................................10
IV.
FACTUAL BACKGROUND ............................................................................................11
A.
Dai and Sutardja’s Relationship with Goldman .....................................................13
1.
Goldman Underwrites Marvell’s IPO and Gains Plaintiffs’Trust ...........................................................................................................13
2.
Plaintiffs Place Their Personal Assets with Goldman, Based onGoldman’s Representation that “Clients Come First” ...............................13
B.
Plaintiffs Were Never Told the Goldman Agreements Deviated FromTheir Conservative Investment Strategies .............................................................14
C.
Plaintiffs Purchase NVIDIA Shares.......................................................................15
D.
Goldman’s Forced Liquidation of Plaintiffs’ NVIDIA Shares ..............................19
E.
Goldman’s Undisclosed Ownership of NVIDIA ...................................................20
F.
In June 2008, Goldman Faced Serious Financial Troubles ...................................21
1.
Raj Rajaratnam Insider Trading Scandal During 2008 ..............................22
2.
Winifred Jiau Insider Trading Scandal From 2006 to 2008 ......................25
 
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COMPLAINTCASE NO.
551950.01
TABLE OF CONTENTS(cont'd)Page
3.
Goldman’s Financial Reality During the Second Half of 2008 .................26
4.
Goldman Had to Be Liquid to Get Banking Status ....................................26
G.
Plaintiffs Are Forced to Sell Shares Due to Goldman’s Financial PanicWhen Goldman Issues An Improper Margin Call Based on ItsFabricated SEC Five Dollar Rule .........................................................................29
1.
Defendants Intimidated Plaintiffs With a Fabricated “SEC FiveDollar Rule” ...............................................................................................30
2.
Goldman’s Conduct Failed to Protect Clients’ Interest:Goldman’s Interests Primary and Clients’ Interests Secondary ................32
H.
Goldman’s 15
th
Principle: Manipulate Conflict of Interests inGoldman’s Favor ...................................................................................................33
1.
Plaintiffs’ Efforts to Prevent the Sale of Their Marvell Stock ...................34
2.
Goldman’s Forwards Contract: A Financial Web to TrapClients and Reap Profits.............................................................................35
3.
Goldman’s Incentive to Push the Forwards Contract onPlaintiffs .....................................................................................................36
I.
Goldman’s Undisclosed Ownership of Marvell ....................................................38
J.
Request For Injunction ...........................................................................................38
VI.
CAUSES OF ACTION ......................................................................................................38
FIRST CAUSE OF ACTION (Common Law Fraud) ...................................................................38
SECOND CAUSE OF ACTION (Breach of Fiduciary Duty).......................................................40
THIRD CAUSE OF ACTION (Consumers Legal Remedies Act – Civ. Code § 1750et seq.) ................................................................................................................................40
FOURTH CAUSE OF ACTION (Unfair Competition – Cal. Bus. & Prof. Code §17200 et seq.) .....................................................................................................................44
PRAYER FOR RELIEF ................................................................................................................46
DEMAND FOR JURY TRIAL .....................................................................................................47
 

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