Goldman Sachs Class Action Lawsuit Filed Over Two CDO Securities

|
Staff Writers

Add Your Comments

A financial fraud lawsuit has been filed against Goldman Sachs over its Hudson Mezzanine securities, claiming that the company created collateralized debt obligation (CDO) securities that were doomed to fail so that it could profit from short positions it had taken on the funds. 

The Goldman Sachs class action lawsuit (pdf) was filed on September 30 in the U.S. District Court for the Southern District of New York by Dodona I, LLC. The lawsuit names Goldman Sachs, Hudson Mezzanine Funding, Corp., Peter L. Ostrem and Darryl K. Herrick as defendants. The two men were vice presidents in Goldman’s structured products CDO group and helped manage, structure and sell the CDOs, the lawsuit claims.

According to the complaint, the two Hudson Mezzanine collateralized debt obligation securities, known as the Hudson 1 and 2 CDOs, constituted financial fraud and relied heavily on subprime mortgage-backed securities. The lawsuit against Goldman Sachs claims that it sold the securities to investors under the expectation that the securities would fail, and had set itself up to profit from the failure. The two securities were downgraded steadily in value from 2007 through 2008 as the subprime mortgage market collapsed.

Do You Know about…

Spinal Cord Stimulator lawsuits

Spinal cord stimulator lawsuits are being investigated for individuals who suffered unnecessary shocks, burns or other problems, often resulting in the need for additional surgery to remove the SCS.

Learn More
SEE IF YOU QUALIFY FOR COMPENSATION
Spinal-Cord-Stimulation-Lawsuit
Spinal-Cord-Stimulation-Lawsuit

Do You Know About…

Spinal Cord Stimulator lawsuits

Spinal cord stimulator lawsuits are being investigated for individuals who suffered unnecessary shocks, burns or other problems, often resulting in the need for additional surgery to remove the SCS.

Learn More
SEE IF YOU QUALIFY FOR COMPENSATION

Goldman Sachs is under investigation by the U.S. Department of Justice (DOJ) and the U.K. Financial Services Authority over similar claims regarding its Abacus CDOs, the lawsuit claims. It faces a class action lawsuit over those CDOs as well. In July, the company settled a fraud lawsuit by the U.S. Security Exchange Commission (SEC) over the Abacus CDOs for $550 million and agreed to make company reforms on how it offered mortgage-backed securities in the future.

The Hudson CDO class action lawsuit is seeking to represent anyone who invested in the CDOs from their inception until September 30, 2010. The lawsuit accuses the defendants of seven counts of financial fraud and seeks unspecified compensatory, punitive damages and court costs for all investors who suffered financial loss.

Tags: Financial Fraud, Goldman Sachs, Investor Lawsuit, New York
Image Credit: |

More Lawsuit Stories

0 Comments

This field is for validation purposes and should be left unchanged.

Share Your Comments

This field is hidden when viewing the form
I authorize the above comments be posted on this page
Post Comment
Weekly Digest Opt-In

Want your comments reviewed by a lawyer?

To have an attorney review your comments and contact you about a potential case, provide your contact information below. This will not be published.

NOTE: Providing information for review by an attorney does not form an attorney-client relationship.

MORE TOP STORIES

Hearings on Evidence That Depo-Provera Causes Meningioma Brain Tumors Set for Late June 2026
A federal judge has scheduled general causation hearings for Depo-Provera brain tumor lawsuits for June 24 through 26.
WaveWriter Alpha Lawsuit Claims Defective Spinal Cord Stimulator Caused Pain and Surgical Removal
A Louisiana man’s Boston Scientific WaveWriter Alpha SCS lawsuit claims the implant failed to provide the promised pain relief and, in fact, made things worse before it needed to be surgically removed.
BetMGM Lawsuit Alleges Gambling Addict's 'Self-Exclusion' Listing Not Honored
A Tennessee man’s lawsuit alleges that BetMGM ignored his placement on self-exclusion lists maintained by both the State of Tennessee and the company’s own platform.