Shareholder who lost out on penny stock sues Goldman Sachs

Pointing The Finger

A shareholder who suffered losses in a penny stock trading debacle in Singapore is suing Goldman Sachs, accusing the investment bank of arbitrarily selling her holdings and saying the sales contributed to a crash in their prices.

Reuters reports that Blumont Group Ltd, Asiasons Capital Ltd and LionGold Corp Ltd - three firms interlinked by cross shareholdings and common officers - lost a combined market value of about $6.4bn in just three days of trading.

The court case may shed light on the causes of the crash. Both the crash and huge run-ups in their share prices earlier in the year left many in the market mystified, prompting the Monetary Authority of Singapore and the stock exchange to launch an extensive review.

The lawsuit was filed in the High Court in London on 20th November by Quah Su Ling, who held stocks in all three companies and is the chief executive of investment firm IPCO International Ltd, the second-largest shareholder in Blumont. It is being brought against Goldman Sachs International, a fully owned unit of Goldman.

Quah said that on 2nd October Goldman demanded she pay back about $49m in loans in cash, giving her only 1.5 hours to do so, according to the filing which was seen by Reuters.

As Quah failed to make the repayment, Goldman issued a notice of default and immediately started to sell Quah's collateral, including shares in investment firm Asiasons, Blumont, a natural resources investment company, and gold miner LionGold, the filing says.

To access the complete Reuters article hit the link below:

Goldman Sachs sued in Singapore penny stock saga

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image: © Lisamarie Babik

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