SAN FRANCISCO— Sehat Sutardja and Weili Dai, the founders of chip vendor Marvell Technology Group Ltd., filed a claim in the San Francisco office of the Financial Industry Regulatory Authority (FINRA) against Goldman Sachs and two account executives, alleging Goldman Sachs manipulated the 2008 financial crisis to defraud the two Silicon Valley executives of several hundred million dollars.
It is alleged that once the two executives' personal wealth was under the financial management of Goldman Sachs, the firm abused the two executives' trust, manipulated their relationship, and ultimately defrauded them of several hundreds of millions of dollars.
Sutardja and Dai filed a lawsuit last year in San Francisco Superior Court against Goldman and the two executives. Both the suit and the FINRA complaint allege that Goldman and the account executives abused the two executives' trust, manipulated their relationship, and defrauded them.
Goldman managed Marvell's 2000 initial public offering. Sutardja and Dai claim that at the time of alleged misdoings by Goldman and the two account executives, the couple were among Goldman's largest private wealth management group clients on the West Coast.
The timing of the FINRA complaint appears timed to tap into a wave of criticism against Goldman stirred up last week by a scathing New York Times editorial by a former Goldman executive that depicted Goldman as a firm that no longer prioritizes client's best interest but often steers them toward action that is most profitable for Goldman, even if it goes against client interests.
The FINRA complaint alleges that, among other things, Goldman encouraged Dai to buy more than $150 million worth of shares in Nvidia Corp. stock, which it claims was a conflict of interest considering that Goldman has its own positions in Nvidia at the time.
"Citing clear conflict of interest, the FINRA claim alleges no one from Goldman ever disclosed to claimants that Goldman was increasing its holdings in Nvidia shares, while simultaneously forcing claimants to sell their Nvidia shares at a loss," according to a statement released by Sutardja and Dai's attorneys. "Indeed, according to the FINRA claim, no one from Goldman ever disclosed to claimants that it was trading in Nvidia at all or that it provided investment banking services to Nvidia."
The FINRA claim also alleges that Goldman falsely issued a "margin call" for Sutardja and Dai's account.
The full statement from Sutardja and Dai's attorneys can be found here.