In August, Goldman Sachs agreed to pay $272 million to settle a lawsuit brought by an Illinois electrical workers’ pension fund over losses suffered due to alleged misrepresentations of the quality of mortgage loans that backed crisis-era mortgage-backed securities.
On Monday, a federal judge approved the proposed settlement between Goldman Sachs and NECA-IBEW Health & Welfare Fund, an electrical workers' pension fund in Decatur, Illinois, finding it to be “fair, adequate and reasonable,” according to a Bloomberg report.
The settlement stems from a lawsuit filed in 2008, when NECA-IBEW sued Goldman Sachs, arguing that Goldman made false statements or omitted key information regarding the nature of the mortgages it sold into 17 different trusts during 2007.
At the time, HousingWire’s Paul Jackson wrote of the lawsuit:
In the Goldman case, NECA-IBEW alleges that Goldman misled investors on the underwriting standards used by various originators, including — who else? — Countrywide Financial; other claims center on the use of inflated appraisals by originating entities for the trusts. Many of the loans in the trusts named in the lawsuit are of the reduced-doc, no-doc, stated-income variety, which NECA-IBEW says are rife with fraud.
Goldman denied any wrongdoing, challenged NECA-IBEW’s ability to sue over the toxic mortgages, and the case eventually nearly made its way onto the Supreme Court’s docket.
In 2013, the Supreme Court decided not to hear the case after the Second Circuit held that NECA-IBEW can claim standing to sue Goldman over the mortgage bonds, even if some of those claims relate to offerings that parties other than the plaintiff were involved in.
Now, nearly eight years later, the lawsuit is finally nearing the finish line.