http://www.thestreet.com/story/13258024/1/goldmans-272-million-mortgage-settlement-may-signal-higher-legal-bills.html?puc=yahoo&cm_ven=YAHOO
For one Illinois pension fund, a seven-year pursuit of legal claims related to the financial crisis paid off, and Goldman Sachs is covering the bill...Last week, the New York bank agreed to pay $272 million to settle class-action claims by labor union NECA-IBEW that it misled investors about the credit quality of mortgage-backed securities the pension fund purchased in 2007 and 2008. Goldman Sachs didn't respond to requests for comment but noted in the proposed agreement that it denies all of the claims as well as any wrongdoing or liability and is settling to avoid the expense of dragging the case out further.
Pursuing the case further would have carried additional risks as well. Already, an appeals court ruling during the case has set a precedent that will make it easier for financial-crisis plaintiffs to attain class-action status because they purchased similar securities. Such cases have often proved difficult to make since the applicable laws were largely drafted in the 1930s -- long before the availability of mortgage-backed securities in their current complex form.
By clarifying the law, the decision by the U.S. Court of Appeals for the Second Circuit, "assisted similarly situated investors, and some of the investors victimized here, in recovering billions of additional dollars in other cases unrelated to Goldman Sachs," said Darren Robbins, a partner with Robbins Geller Rudman & Dowd LLP who represented NECA-IBEW.
Goldman Sachs appealed the ruling to the U.S. Supreme Court, which declined to review it.
The appeals court's decision allows investors in different tranches of the same security to band together. Previously, investors of one tranche could only bring a case to court with members of the same tranche, even though they were all effectively invested in the same security, with the same disclosures in its offering agreement...
HA! TAKE THAT, GOLDMAN!
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