But Ed Canaday, the Goldman Sachs spokesman, said in a statement that "the suit is completely without merit".

Bailout repaid

 

In June last year, the New York-based bank repaid the bailout money to the government.

Goldman received the government funds in October 2008 as part of the Troubled Asset Relief Programme (Tarp), a US government plan which provided banks with capital in exchange for preferred stock and warrants to purchase common shares.

The programme was launched after the Lehman Brothers investment bank collapsed and insurer American International Group needed a government bailout to remain in business.

The government investment included certain restrictions, such as caps on executive compensation, but these ended when Goldman Sachs repaid the $10bn.