The lawsuit claims Goldman (GS +1.1%) took advantage of the trust earned with the managers of the fund to exert "under influence" in piling them into a series of equity derivatives trades totaling more than $1B in 2008 that expired worthless (though Goldman made an estimated $350M). Goldman denies the charges.
The claims aren't too far out of line with a common theme of that era - that Goldman routinely took advantage of clients' lack of sophistication. The House of Blankfein has since formed a business-standards committee to stop such practices. "For all of our employees, the experience of initiating, approving and executing a transaction for a client at Goldman Sachs is now fundamentally different" than 5 years ago, wrote the committee last year.
In other news, a deal for Denmark to unload a 19% stake in state-owned Dong Energy to Goldman threatens to bring down the government there. Opposition has grown amid Goldman's plan to transfer ownership of Dong to the tax havens of Luxembourg, the Cayman Islands, and even Delaware. There's also a put option allowing Goldman to sell back its shares to country if an IPO doesn't take place by 2018.