New York, NY: A $235 million settlement has been approved, ending a securities class action brought by a pension fund against Citigroup Global Markets Inc., Goldman Sachs & Co. and UBS Securities LLC, over allegations that the Residential Accredit Loans Inc. (RALI) certificates' seller, Residential Capital, and the underwriter defendants failed to disclose weaknesses in the underlying loans in approximately 59 offerings.
The lawsuit was brought in 2008 by the New Jersey Carpenters Health Fund in New York over the sale of mortgage-backed securities to the fund as well as other investors in several offerings between 2006 and 2007 that were issued and sold by RALI. The class action claimed the prospectuses had material misstatements and omissions.
There are three tiers of putative class members, and the funds will be distributed baesd on the strength of their claims at the time of settlement.
The case is New Jersey Carpenters Health Fund et al. v. Residential Capital LLC et al., case number 1:08-cv-08781, in the U.S. District Court for the Southern District of New York.
