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Related: About this forumGoldman loses bid to end lawsuit over risky CDO
Source: Reuters
Goldman loses bid to end lawsuit over risky CDO
By Jonathan Stempel
NEW YORK | Wed Mar 21, 2012 6:40pm EDT
(Reuters) - Goldman Sachs Group Inc lost its bid to dismiss a lawsuit accusing it of defrauding investors by selling risky debt linked to subprime mortgages that it planned to bet against.
The decision by U.S. District Judge Victor Marrero in New York keeps alive a hedge fund's claims over a $2 billion offering of collateralized debt obligations, amid intense scrutiny over Goldman's activities before and after the 2008 financial crisis.
Marrero said the hedge fund Dodona I LLC may pursue nearly all its claims against Goldman, including that the Wall Street bank recklessly or intentionally sold the Hudson Mezzanine Funding CDOs to offload subprime risk on unsuspecting investors.
"Goldman's sudden -- and prescient -- shift to reducing subprime risk supports the inference that it possessed some unique insight" about the "bittersweet potion" of CDOs it was selling, Marrero wrote in a 64-page decision.
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By Jonathan Stempel
NEW YORK | Wed Mar 21, 2012 6:40pm EDT
(Reuters) - Goldman Sachs Group Inc lost its bid to dismiss a lawsuit accusing it of defrauding investors by selling risky debt linked to subprime mortgages that it planned to bet against.
The decision by U.S. District Judge Victor Marrero in New York keeps alive a hedge fund's claims over a $2 billion offering of collateralized debt obligations, amid intense scrutiny over Goldman's activities before and after the 2008 financial crisis.
Marrero said the hedge fund Dodona I LLC may pursue nearly all its claims against Goldman, including that the Wall Street bank recklessly or intentionally sold the Hudson Mezzanine Funding CDOs to offload subprime risk on unsuspecting investors.
"Goldman's sudden -- and prescient -- shift to reducing subprime risk supports the inference that it possessed some unique insight" about the "bittersweet potion" of CDOs it was selling, Marrero wrote in a 64-page decision.
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Read more: http://www.reuters.com/article/2012/03/21/us-goldman-cdo-lawsuit-idUSBRE82K16Q20120321
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Goldman loses bid to end lawsuit over risky CDO (Original Post)
Eugene
Mar 2012
OP
Po_d Mainiac
(4,183 posts)1. Marrero must not have gotten the memo...Hmmmm
dixiegrrrrl
(60,010 posts)2. red...kick ...and
for the good news.
Demeter
(85,373 posts)3. Thanks for posting this!
Stop in on the Stock Market Watch or Weekend Economists threads, Eugene. We need stuff like this.
PoliticAverse
(26,366 posts)4. Good. n/t