Supreme Court Rejects Goldman Sachs Appeal in MBS Case
Goldman Sachs Group will be forced to defend itself against claims it deceived investors about mortgage-backed securities that lost value during the 2008 financial crisis after the U.S. Supreme Court denied its appeal in the case March 18, Reuters reported.
The court's action allows the NECA-IBEW Health & Welfare Fund, which owned mortgage-backed securities underwritten by Goldman, to move forward with its lawsuit on behalf of investors in securities it did not own but that were backed by mortgages from the same lenders.
Darren Robbins, a partner at Robbins Geller Rudman & Dowd representing the plaintiffs, told Reuters that about 10 cases within the 2nd Circuit are affected by the Supreme Court order, including one against JPMorgan Chase that his firm also is handling.
“These mortgage-backed securities are ground zero for the mortgage meltdown,” Robbins told Reuters. “Our clients are certainly very pleased with the outcome. It reiterates the common sense test endorsed by the 2nd Circuit. It's a good day for pension funds and investors, for sure.”
Goldman and other banks continue to face thousands of lawsuits by investors seeking to recover losses on mortgage securities stemming from the financial crisis.