Prudential Files RMBS Lawsuits Against Goldman Sachs and RBS

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On August 21, 2012, several Prudential entities sued several RBS entities in New Jersey State court seeking to recover damages allegedly suffered in connection with over $343 million in RMBS. Prudential also sued several Goldman Sachs entities in New Jersey State court on August 24, 2012, seeking to recover damages allegedly suffered in connection with over $270 million in RMBS. In both cases, Prudential alleges that the offering documents for the RMBS at issue contain untrue statements of material fact and omissions concerning the underwriting standards used to originate the underlying loans, the result of the defendants’ pre-closing due diligence, owner-occupancy rates, the process by which appraisals in connection with the underlying loans were performed, the assignment of the loans to the RMBS trusts, and the credit ratings assigned to the RMBS. In the case against RBS, Prudential also alleges that the offering documents contain untrue statements of material fact and omissions concerning the loans’ LTV and CLTV ratios; in the case against Goldman Sachs, Prudential also alleges that the offering documents contain untrue statements of material fact and omissions concerning exceptions made during the loan underwriting process. Prudential asserts causes of action for common-law fraud / fraudulent inducement, aiding and abetting fraud, negligent misrepresentation, and violation of New Jersey’s civil RICO statute. Prudential seeks compensatory damages, treble damages in connection with its RICO claim, rescission, attorneys’ fees and costs, and prejudgment interest. RBS Complaint. Goldman Sachs Complaint.

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Orrick - Structured Finance Group on:

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