Goldman Sachs settles mortgage backed derivative class action

August 13, 2012 by

Goldman Sachs Group Inc. reached a class action settlement with investors in a $698 million mortgage-backed securities offering, a lawyer for the plaintiffs told a federal judge in New York.

David Wales, who represents the Public Employees’ Retirement System of Mississippi, told U.S. District Judge Harold Baer, in a letter made public on July 17, that both sides had accepted a settlement proposed by a mediator.  Details of the agreement were not disclosed.

Mr. Wales said the parties will file papers by July 31 asking Judge Baer to approve the settlement. 

The Mississippi retirement fund sued in 2009, claiming New Century Financial Corp., which originated the mortgages underlying the securities, failed to adhere to its underwriting standards and overstated the value of the collateral backing the loans.  The fund claimed Goldman Sachs did not conduct proper due diligence when it bought the loans in 2005.

Judge Baer, in February, granted a request by the Mississippi fund to represent a class of more than 150 investors in the offering.

The case is Public Employees Retirement System of Mississippi v. Goldman Sachs Group Inc., 09-cv-01110, U.S. District Court, Southern District of New York (Manhattan).

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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