Investors Class Action Against Goldman Sachs Revived in 2nd Circuit
Posted Sep 6, 2012 3:50 PM CDT
By Stephanie Francis Ward
A class action against Goldman Sachs Group Inc. brought by investors who claim the investment bank misled them about risks that come with mortgage securities was revived Thursday in the New York City-based 2nd U.S. Circuit Court of Appeals.
The finding reverses a 2010 judgement dismissing the action, Bloomberg News reports. A U.S. district court judge had found that NECA only bought certificates from two offerings, and lacked standing as plaintiffs for the other 15 in question.
According to Reuters, the three-judge panel found that lead plaintiff NECA-IBEW Health & Welfare Fund does not need to allege out-of-pocket loss to pursue a claim that the securities lost value. NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co.
In the suit, which was originally filed in December 2008, the plaintiffs alleged that documents for 17 securities offerings had false and misleading information about underwriting guidelines for the mortgage lenders and loan property appraisals.