Allstate Sues Goldman Sachs Over Toxic Mortgage Securities

By | August 17, 2011

Allstate Corp. is suing Goldman Sachs Group Inc., saying more than $122 million in mortgage-backed securities the insurance company bought beginning in 2006 were fraudulent.

Allstate said in a statement that it filed the lawsuit in New York state court against Goldman Sachs and certain affiliates. The complaint alleges violations of state laws involving residential mortgage-backed securities.

Allstate claims Goldman Sachs provided documents about the investments that “contained untrue statements and omitted material facts.” The complaint seeks unspecified damages.

Goldman Sachs spokesman Michael DuVally declined to comment on the lawsuit.

Allstate says it purchased more than $122 million in mortgage-backed securities from Goldman Sachs and affiliates in 2006 and 2007. The value of those securities plunged as the housing market bubble burst.

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