Goldman Sachs Settles with Insurers over the Sale of Junk Mortgage-Backed Securities
Insurance companies Union Central Life Insurance Co., Ameritas Life Insurance Corp. and Acacia Life Insurance Co. have settled claims against brokerage giant Goldman Sachs & Co. arising from their 2011 complaint which accused a the firm of selling them low quality, mortgage-backed securities. The notice of the settlement was contained in a letter filed in a New York federal court earlier today.
This settlement is just the latest in a series of settlements reached with the insurers and brokerages , including deals reached with Morgan Stanley & Co. and SunTrust Capital Markets Inc. last year. Morgan Stanley and Goldman were the only two remaining defendants in the 2011 suit. The complaint had alleged Goldman overstated the quality of the loans contained in the mortgage-backed securities…a very common allegation in the aftermath of the 2008 credit crisis.
Many of the subprime mortgage paper ended up being sliced up, repackaged and sold to individual investors in the form of high-yield mutual funds and structured notes. If you lost money as a result of a mortgage backed investment, please contact the experienced securities fraud attorneys at Colling Gilbert Wright & Carter for a free case evaluation.