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

Litigation Attorney

USA-FL-Mount Dora

Stone & Gerken, P.A., a boutique firm since 1992, is seeking an attorney with 5 to 8 years of litiga...

Apply now

Staff Attorney

USA-WI-Milwaukee

We are an established bankruptcy firm seeking a full-time Staff Attorney in our Milwaukee location f...

Apply now

Senior Associate Attorney

USA-CA-Murrieta

SENIOR ASSOCIATE ATTORNEY/POTENTIAL EQUITY SHAREHOLDER Our firm is pleased to announce we are seeki...

Apply now

Associate Attorney

USA-OH-New Albany

Established law firm in New Albany, Ohio exclusive to the area of Elder Law is seeking an Associate ...

Apply now

BCG FEATURED JOB

Locations:

Keyword:



Search Now

SEC Attorney

USA-MA-Waltham

Waltham office of our client seeks SEC attorney with 3-5 years of experience to assist with all aspe...

Apply Now

Commercial Litigation Attorney

USA-CA-Los Angeles

Los Angeles office of a BCG Attorney Search Top Ranked Law Firm seeks commercial litigation attorney...

Apply Now

Mid to Senior-level Real Estate Associate Attorney

USA-FL-Miami

Miami office of a BCG Attorney Search Top Ranked Law Firm seeks mid to senior-level real estate asso...

Apply Now

Most Popular

SEARCH IN ARCHIVE

To Top