Goldman Sued by Stichting Pensioenfonds in New York
Goldman Sachs Group Inc. (GS) was sued by the Netherlands’ biggest retirement fund, accusing the investment bank of making false or misleading statements in selling residential mortgage-backed securities.
Stichting Pensioenfonds ABP (ADPZ) sued New York-based Goldman Sachs in New York State Supreme Court today, saying that the bank knew that originators of the loans underlying the investments hadn’t followed underwriting standards.
“Goldman knew of, and facilitated, the wholesale and systematic abandonment of underwriting guidelines by various third-party originators faced with Goldman’s demands that as many loans as possible be originated so that they could be packaged and sold to investors like plaintiff,” lawyers for Stichting said in the lawsuit.
Stichting also sued Deutsche Bank AG and JPMorgan Chase & Co. over sales of mortgage-backed securities in New York state court last year.
Stichting, the pension fund for Dutch public educational and government workers, has more than 250 billion euros ($332.8 billion) in assets under management, according to the complaint.
Pools of home loans securitized into bonds were a central part of the housing bubble that helped send the U.S. into the biggest recession since the 1930s. The housing market collapsed, and the crisis swept up lenders and investment banks as the market for the securities evaporated.
Michael Duvally, a spokesman for Goldman Sachs, declined to comment on the lawsuit in a telephone interview.
The case is Stichting Pensioenfonds ABP v. Goldman Sachs Group Inc., 650264/2012, New York State Supreme Court, New York County (Manhattan).
To contact the reporters on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net.
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.
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