Goldman Sachs must face fraud claims from insurer - New York court
By Joseph Ax - Reuters (The West Australia)
NEW YORK (Reuters) - Goldman Sachs Group Inc must face fraud claims brought by CIFG Assurance North America over insurance it provided for $275 million (177 million pounds) in mortgage-backed securities, a New York state appeals court ruled on Tuesday.
CIFG claimed in a 2011 lawsuit that the investment bank fraudulently induced it to provide insurance for a portfolio of more than 6,000 subprime residential mortgages by concealing the shoddy quality of the loans.
A trial judge in Manhattan threw out that claim last year, ruling that CIFG would have uncovered the alleged misrepresentations had it performed proper due diligence.
The New York State Supreme Court's Appellate Division, First Department, reversed on Tuesday, finding that CIFG had done enough by having an outside consultant analyze the loans.
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