{"id":5218,"date":"2011-08-18T00:00:00","date_gmt":"2011-08-18T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2011\/08\/allstate_files_securities_frau"},"modified":"2022-04-06T10:42:06","modified_gmt":"2022-04-06T15:42:06","slug":"allstate-files-securities-frau","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/allstate-files-securities-frau\/","title":{"rendered":"Allstate Files Securities Fraud Lawsuit Against Goldman Sachs Over More Than $123M of Mortgage-Backed Securities"},"content":{"rendered":"

According to Allstate Corp., Goldman Sachs Group Inc. committed securities fraud<\/a> by fraudulently selling the insurer over $123 million of mortgage-backed securities prior to the collapse of the housing market. Allstate is also accusing Goldman of making \u201cuntrue statements\u201d and leaving out \u201cmaterial facts\u201d about the mortgages.<\/p>\n

Allstate Insurance Corp, a subsidiary of Allstate Corp, filed the securities fraud complaint in New York State Supreme Court this week. The plaintiff is accusing the broker of violating state laws and negligent misrepresentation. Allstate believes that Goldman marketed the MBS as low-risk with strict underwriting criteria even though the latter knew the lenders had stopped abiding by the guidelines and that loans were being produced without the chance of payback.<\/p>\n

Goldman has already settled for $550 million similar securities fraud charges filed by the SEC. This was the largest penalty a Wall Street financial firm has ever been ordered to pay. The Commission claimed that Goldman encouraged investors to buy into complex mortgage investments while failing to tell them that a client who was betting against the securities had crafted them. In April, a Senate Report said that in an attempt to move risk away from Goldman and to investors, the broker marketed four complex mortgage securities.<\/p>\n

With this latest securities lawsuit against Goldman, Allstate has now filed nine MBS lawsuits since December. The defendants of the other complaints are Countrywide Financial, Bank of America Corp., Morgan Stanley,\u00a0Merrill Lynch and Co, JPMorgan Chase & Co, Citigroup Inc., Deutsche Bank AG, and Credit Suisse Group:<\/p>\n

\u2022 The securities lawsuit against Countrywide is over $700 million of toxic MBS that the insurer purchased. Bank of America is named in the complaint because it purchased Countrywide in 2008.<\/p>\n

\u2022 The complaint against Morgan Stanley is over Allstate\u2019s purchase of over $104 million in residential MBS in six offerings and the broker\u2019s \u201ccentral role\u201d in creating and selling the securities. Allstate says that Morgan Stanley either knew or \u201crecklessly disregarded\u201d that the lenders involved were putting out risky loans that were not in compliance with underwriting standards.<\/p>\n

\u2022 Allstate\u2019s lawsuit against Merrill Lynch involves the allegedly fraudulent sale of approximately $167 million of residential mortgage-backed securities.<\/p>\n

\u2022 The insurer is accusing JP Morgan Chase of misrepresenting the risks involved in over $757 million of mortgage securities that it purchased.<\/p>\n

\u2022 Allstate bought over $200 million of MBS from the Citigroup defendants and approximately $185 million from the Deutsche bank units. Misrepresentations and omissions related underwriting standards, loan-to-value ratios, and owner occupancy data are among the allegations.<\/p>\n

\u2022 Allstate\u2019s securities lawsuit against Credit Suisse is over $231 million of MBS. Allstate, which bought the securities from the financial firm, says that the latter did not disclose that the underlying loans were toxic. Allstate is alleging fraudulent inducement, fraud, and negligent misrepresentation.<\/p>\n

Our securities fraud attorneys<\/a> represent investors who have suffered financial losses from investing in mortgage-backed securities.<\/p>\n

Allstate sues Goldman over sour mortgage-backed securities<\/a>, USA Today, August 16, 2011<\/p>\n

Allstate Sues Goldman Sachs Over Toxic Mortgage Securities<\/a>, Insurance Journal, August 17, 2011<\/p>\n


\nMore Blog Posts:<\/strong>
\nMorgan Stanley Reports a Possible $1.7B in Mortgage-Backed Securities Losses<\/a>, Institutional Investor Securities Blog, August 16, 2011<\/p>\n

Bank of America and Countrywide Financial Sued by Allstate over $700M in Bad Mortgaged-Backed Securities<\/a>, Stockbroker Fraud Blog, December 29, 2010<\/p>\n

Bank of America and Countrywide Financial Sued by Allstate over $700M in Bad Mortgaged-Backed Securities<\/a>, Stockbroker Fraud Blog, December 29, 2010<\/p>\n

Goldman Sachs Settles SEC Subprime Mortgage-CDO Related Charges for $550 Million<\/a>, Stockbroker Fraud Blog, July 30, 2010<\/p>\n

Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

According to Allstate Corp., Goldman Sachs Group Inc. committed securities fraud by fraudulently selling the insurer over $123 million of mortgage-backed securities prior to the collapse of the housing market. Allstate is also accusing Goldman of making \u201cuntrue statements\u201d and leaving out \u201cmaterial facts\u201d about the mortgages. Allstate Insurance Corp, a subsidiary of Allstate Corp, […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3752,3947],"tags":[],"class_list":["post-5218","post","type-post","status-publish","format-standard","hentry","category-financial-firms","category-goldman-sachs"],"yoast_head":"\nAllstate Files Securities Fraud Lawsuit Against Goldman Sachs | Securities Fraud Attorneys<\/title>\n<meta name=\"description\" content=\"Goldman Sachs Group Inc. committed securities fraud by fraudulently selling insurer mortgage-backed securities prior to the collapse of the housing market.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/allstate-files-securities-frau\/\" 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