Class action over mortgage backed securities settles for $235 million

August 17, 2015 by

StockExchangeOn July 31, 2015, U.S. District Court Judge Katherine Polk Failla approved a $235 million class action settlement involving Citigroup Global Markets Inc., Goldman, Sachs & Co., and UBS Securities LLC, over mortgage-backed certificates issued by Residential Accredit Loans, Inc. (“RALI”).

In the litigation, plaintiffs contended that Citigroup, Goldman and UBS, as the underwriters of the mortgage loan collateral, conducted inadequate due diligence in originating the loans at issue and made “material misstatements and omissions of material facts” in offering documents in violation of the Securities Act. Specifically, the plaintiffs alleged that the registration statements and prospectuses issued by RALI were misleading as to the quality of the mortgage loans backing the securities, which Citigroup, Goldman and UBS helped underwrite.

As a result, the plaintiffs claimed to have suffered significant damages when their investments were downgraded.

This $235 million settlement follows a 2013 resolution for $100 million among the plaintiffs, and Residential Capital, LLC, Residential Funding Company, LLC, RALI, and certain individual defendants.

Steve Larson
An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, consumer cases, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, employment matters, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve's clients value his creative approach to resolving complex litigation matters.

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