Top Goldman Sachs lawyers accused of covering up sexual harassment

The suit comes just as the bank's image has been tarnished over the 1MDB scandal. PHOTO: REUTERS

NEW YORK (BLOOMBERG) - Goldman Sachs Group's general counsel and head of litigation were sued by a subordinate who said she was forced out after she spoke up about the sexual harassment of another female lawyer in the group.

Marla Crawford, a former vice president and associate general counsel in Goldman's litigation and regulatory proceedings group, filed suit on Monday (Oct 26) in New York state court, alleging that she faced retaliation after raising concerns about global litigation head Darrell Cafasso using his position "to romantically prey" upon an unidentified woman who did not reciprocate his attentions.

The suit comes just as the bank's image has been tarnished by accusations and punishments against the bank after a years-long Justice Department probe into the plundering of Malaysia's 1MDB investment fund, for which Goldman helped raise billions of dollars. The scandal has cost the bank more than US$5 billion (S$6.8 billion) and forced its Asia division to plead guilty to a US criminal charge.

The suit alleges Mr Cafasso told General Counsel Karen Seymour about his conduct after his wife found out about it. Ms Crawford claims Ms Seymour proceeded to cover up for Cafasso, hiring an outside law firm to conduct a "bogus" investigation and telling another senior Goldman lawyer she was trying to "put this genie back in the bottle."

A Goldman spokesperson said the bank conducted a review of the allegations in this complaint and found that they were completely without merit. "Goldman Sachs has a robust process for taking disciplinary action when warranted, and the firm took proper and appropriate disciplinary action with respect to the personnel matters that Ms. Crawford references," the spokesperson said.

According to the suit, the woman targeted by Mr Cafasso hired attorney Gloria Allred to represent her and left Goldman. Ms Allred declined to comment.

Bonus cut

Ms Crawford, who says she was a confidant of the woman, claims she tried to provide relevant information about Mr Cafasso's conduct but was told to keep quiet. She says her job ratings were subsequently lowered, her bonus was cut and she was terminated after she refused to move to Dallas after more than 10 years with the bank, according to the suit.

"Never in my wildest imagination would I ever think I would be in this position," Ms Crawford said on Monday in an interview.

The Goldman spokesperson said Ms Crawford's division was relocated to a different city as part of a restructuring and she declined to move.

Ms Seymour joined Goldman as general counsel two years ago amid the US criminal investigation into 1MDB. Mr Cafasso came aboard as a managing director and associate general counsel later that year. Both were formerly partners at the New York law firm of Sullivan & Cromwell.

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