Categorized | Legal News

Judge: Goldman must face class-action suit over CDOs.


The Wall Street Journal (1/24, Chaudhuri, Subscription Publication, 5.91M) reports that a Federal judge ruled Goldman Sachs must face a class-action lawsuit accusing the bank of defrauding investors who bought over $2 billion in CDOs linked to subprime mortgages. Hedge fund Dodona I LLC, which leads the group suing the firm, argues Goldman bet subprime mortgages and related securities would lose value at the same time it offered the “Hudson” CDOs. Goldman Sachs had argued that “the proposed class is rife with differences, idiosyncrasies and conflicts” and there is “no reason why claims relating to the Hudson CDOs could not be asserted independently.”

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