According to Bloomberg, The Goldman Sachs Group Inc. (NYSE: GS) has won the dismissal of the case over the sale of residential mortgage-backed securities (NASDAQ: RMBS) worth $450 million. The State Supreme Court Justice Charles Ramos in New York rescinded claims against Goldman by the investors who sued the bank for selling faulty RMBS with misleading statements.
Earlier in Sep 2012, Dublin-based Phoenix Light SF Ltd. had dragged Goldman, along with JPMorgan Chase & Co. (NYSE: JPM), Bank of America Corporation (NYSE: BAC) as well as Ace Securities – a wing of Deutsche Bank AG (NYSE: DB) – to court for losses suffered over faulty mortgage-backed securities. Now, Phoenix Light is a limited liability company, which inherits legal claims in lieu of rescue finance on behalf of companies that have collapsed or are on the verge of a collapse.
The judge claimed the investors only reviewed the data presented in the securities' offering documents rather than reviewing credentials of the underlying loans. Moreover, on such review, the underlying risks could have been determined and losses have been minimized. Therefore, the judge cleared Goldman from the case claiming there were no allegations regarding the bank's denial for the review of underlying loans' papers on demand from investors.
With this victory, Goldman plans to move forward with its business strategies, after attempting to end issues related to the financial crisis. Therefore, it is in the interest of the company to resolve such matters at the earliest. Goldman currently carries a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
JPMORGAN CHASE (NYSE: JPM): Free Stock Analysis Report
DEUTSCHE BK AG (NYSE: DB): Free Stock Analysis Report
GOLDMAN SACHS (NYSE: GS): Free Stock Analysis Report
BANK OF AMER CP (NYSE: BAC): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!