Goldman Mortgage Class-Action Suit Revived

Ruling a victory for investors who say they were misled

By Rob Quinn,  Newser Staff

Posted Sep 7, 2012 1:42 AM CDT | Updated Sep 7, 2012 2:01 AM CDT

(Newser) – Goldman Sachs won't be charged for its role in the financial crisis, but it still faces plenty of lawsuits from clients it's accused of criminally misleading—and the list just got longer. A federal appeals court has decided to revive a class-action suit over mortgage-backed securities, and allow a plaintiff to sue the bank over securities it didn't invest in, reports Reuters. The court, reversing parts of a 2010 ruling, decided that a plaintiff accusing the bank of misleading investors about the risks of mortgage offerings can lead a class-action suit on behalf of investors in similar securities.

The court decided that the plaintiff, an electrical workers' health and welfare fund, could represent investors in five other offerings besides the two it invested in. The plaintiff has class standing "because such claims implicate the same set of concerns as plaintiff’s claims," a judge wrote in the ruling, which could lead to Goldman and other banks being hit with a much wider range of lawsuits from mortgage securities investors. A Goldman spokesman declined to comment.

Goldman is facing a flood over lawsuits for allegedly shafting clients as the mortgage bubble burst.
Goldman is facing a flood over lawsuits for allegedly shafting clients as the mortgage bubble burst.   (AP Photo/Richard Drew, File)
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