Goldman tentatively agrees to pay $270 million to settle lawsuit: source
By Karen Freifeld
(Reuters) - Goldman Sachs Group Inc has tentatively agreed to pay about $270 million to settle a lawsuit by investors, according to a source familiar with the matter.
Pension funds led by NECA-IBEW Health & Welfare Fund of Illinois accused the bank of misleading investors about the risks associated with mortgage securities offerings.
NECA-IBEW, an electrical workers' pension fund, owned some mortgage-backed certificates underwritten by Goldman.
Goldman and its rivals have faced many lawsuits by investors seeking to recoup losses on mortgage securities.
The investors typically have claimed they were misled about the risks relating to the underlying home loans, most of which were made before or as the U.S. housing slump took hold in 2007.
A spokesman for Goldman Sachs declined to comment and attorneys for the fund did not immediately return calls for comment.
Also on Friday, Goldman Sachs was among a group of banks that received court approval for a $235 million settlement related to mortgage securities reached in February, according to a court filing.
Citigroup Inc, Goldman Sachs and UBS AG agreed to pay $235 million to settle U.S. litigation accusing them of concealing the risks of mortgage securities sold by the former Residential Capital LLC before the global financial crisis. Continued...