CIFG Assurance Sues Goldman Sachs Over $275 Million in Mortgage Securities
By Karen Freifeld – Aug 17, 2011 10:33 AM ET
CIFG Assurance North America Inc. sued Goldman Sachs Group Inc. (GS) for fraud over $275 million in residential mortgage-backed securities.
Goldman Sachs made misrepresentations in connection with the securitization of a portfolio of 6,204 mortgage loans, according to the lawsuit filed yesterday in New York State Supreme Court in Manhattan. CIFG insured about $275 million of securities from the portfolio.
The investment bank duped investors and insurers into assuming its market risk, even as Goldman Sachs profited from underwriting fees, trading opportunities and bets on a decline in the subprime market, New York-based CIFG said.
While Goldman Sachs aggressively sought to liquidate its position in residential mortgage-backed securities, “it also sought to exploit the crisis,” according to the complaint.
Michael Duvally, a spokesman for New York-based Goldman Sachs, declined to comment on the lawsuit.
The case is CIFG Assurance North America Inc. v. Goldman, Sachs & Co., 652286/2011, New York Supreme Court, New York County (Manhattan).
To contact the reporter on this story: Karen Freifeld in New York at email@example.com.