A class-action suit against Goldman Sachs Group Inc. over mortgage-backed securities was revived by a federal appeals court in New York.
Investors in 17 securities offerings, led by the NECA-IBEW Health and Welfare Fund, sued Goldman Sachs over securities backed by pools of residential mortgages originated by National City Mortgage Co., Countrywide Home Loans, Washington Mutual Bank and others, according to an opinion by the court today.
U.S. District Judge Miriam Goldman Cedarbaum dismissed the suit in 2010, ruling that NECA, which purchased certificates from only two of the offerings, lacked standing to represent investors in the other 15. A three-judge panel of the appeals court reversed that ruling today. The court also reversed Cedarbaum's ruling that NECA failed to claim a sufficient loss from the investments.
"We hold that plaintiff has class standing to assert the claims of purchasers of certificates backed by mortgages originated by the same lenders that originated the mortgages backing plaintiff's certificates, because such claims implicate ‘the same set of concerns' as plaintiff's claims," U.S. Circuit Judge Barrington Parker said in the opinion.
Michael DuVally, a spokesman for New York-based Goldman Sachs, declined to comment immediately on today's ruling.
The case is NECA-IBEW Health and Welfare Fund v. Goldman Sachs & Co., 11-2762, U.S. Court of Appeals for the Second Circuit (Manhattan).