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Goldman Sachs Mortgage Backed Securities Class Action Certified

New York, NY: Goldman Sachs Group Inc will face a securities class action lawsuit accusing it of misleading investors about a 2006 offering of securities backed by risky mortgage loans from a now-defunct lender.

U.S. District Judge Harold Baer of Manhattan certified the class-action lawsuit brought by investors in the GSAMP Trust 2006-S2, a $698 million offering of certificates based on a pool of second-lien home mortgages.

The underlying loans were made by New Century Financial Corp, a subprime mortgage specialist that went bankrupt in 2007.

Plaintiffs in the lawsuit said New Century ignored its own underwriting standards and used improper appraisals when making the loans, and Goldman failed to conduct adequate due diligence when it bought the loans and packaged them into securities. The suit claims that the GSAMP offering documents were false and misleading.

Goldman Sachs GSAMP Securities Class Action Legal Help

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Last updated on Feb-6-12