Legal News

Goldman Agrees to $26.6 Million Settlement with Misled Investors
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

In the case of Public Employees’ Retirement System of Mississippi v. Goldman Sachs Group Inc at the U.S. District Court, Southern District of New York, the scene seems to be reaching towards a settlement. In the class-action suit, investors claimed that they had been misled into purchasing securities backed by risky loans from New Century Financial Corp, a now-defunct subprime mortgage lender. The ‘misled’ investors had claimed that Goldman’s boilerplate disclosures for the $698 million GSAMP Trust 2006-S2 were false and misleading, because they failed to reveal how New Century had ignored its own underwriting standards and used inflated appraisals. The plaintiffs also claimed that Goldman failed in due diligence when it bought New Century loans and packaged them into securities for the 2006 offering. On the following year, New Century went bankrupt.

In recent cases involving investors holding banks responsible for misleading them about the quality of mortgage securities, banks have already established a tradition of settlement to avoid culmination of legal proceedings to findings of guilt. Merrill Lynch unit of Bank of America settled one such case for $315 million, and Wells Fargo settled another for $125 million. In 2010, Goldman had agreed to pay $550 million to settle U.S. Securities and Exchange Commission fraud charges over a collateralized debt obligation it sold.

For big businesses, it is one of the best points of U.S. democracy that investigations and court proceedings can be prevented from reaching their natural ends by paying down a part of the money obtained by illegal means as settlement, and castrating justice from reaching beyond a view of the tip of the iceberg.

  
What
Where


The offered settlement in this case requires the approval of U.S. District Judge Harold Baer in Manhattan. Lawyers for the plaintiffs said that when the suit had been initiated in February 2009, investors had received more than $396 million in principal and interest on their securities, while $177 million was outstanding. The suit had been awarded class-action status in February this year after the court rejected Goldman’s arguments that some of the investors were “highly sophisticated” and may have had knowledge about New Century’s practices.



 

RELEVANT JOBS

Paralegal

USA-CA-Rancho Cucamonga

Paralegal position available at a general practice law firm in Rancho Cucamonga. We are looking for ...

Apply now

Paralegal / Legal Assistant

USA-VA-Vienna

Description A small, highly respected family law firm located in Tyson\'s Corner, Virginia seeks ...

Apply now

LITIGATION ATTORNEY (PL/BL 5-8)

USA-CA-San Diego

Experienced civil litigation attorney with 5-8 years of experience to handle complex and business li...

Apply now

Paralegal / Legal Assistant

USA-NV-Las Vegas

Qualifications Experience: Paralegal, 5 years (Preferred) Full Job De...

Apply now

BCG FEATURED JOB

Locations:

Keyword:



Search Now

Environmental And Land Use Associate Attorney

USA-NY-New York City

New York City office of a BCG Attorney Search top ranked law firm seeks Environmental and Land Use A...

Apply Now

Litigation Associate Attorney

USA-UT-Saint George

St. George office of our client seeks Litigation Associate Attorney with 1 year of experience. The c...

Apply Now

Partner-level Associate Attorney

USA-NY-New York City

New York City office of our client seeks Partner-level Associate Attorney with 18 years of litigatio...

Apply Now

Most Popular

SEARCH IN ARCHIVE

To Top