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NEW YORK - (Mealey's) Lead plaintiffs in
a securities class action lawsuit against The Goldman Sachs Group Inc. and
others have agreed to settle their claims for more than $26 million, according
to court documents filed yesterday in a New York federal court (Public
Employees' Retirement System of Mississippi v. Goldman Sachs Group, Inc., et
al., No. 09-1110, S.D. N.Y.).
According to a footnote
contained in the memorandum in support of the motion for preliminary approval
of settlement, "the total settlement amount is $26,612,500.00, which consists
of: (i) a fund of $21,312,500.00, subject to a $1,312,500.00 reduction if
Stichting APB, which has filed a private action against Goldman Sachs, elects
to exclude itself from the Class; and (ii) a fund of $5,300,000.00 for
attorneys' fees, litigation expenses, and claims administration expenses,
subject to Court approval."
Lead counsel for the
shareholders, attorney David L. Wales of Bernstein Litowitz Berger &
Grossmann, sent a letter to U.S. Judge Harold Baer Jr. of the Southern District
of New York on July 17 stating that both sides had accepted the terms of the
settlement and that settlement documents would be filed in the District Court
by July 31.
Lead plaintiff Public
Employees' Retirement System of Mississippi (MissPERS) filed a second amended
complaint in the District Court on behalf of all purchasers of mortgage
pass-through certificates issued pursuant or traceable to GS Mortgage
Securities Corp.'s Aug. 15, 2005, registration statement.
MissPERS alleged that Goldman
Sachs Group, offering sponsor Goldman Sachs Mortgage Co., depositor GS
Mortgage, Goldman, Sachs & Co. Inc. and GS Mortgage officers and directors
Daniel L. Sparks, Mark Weiss and Jonathan S. Sobel (collectively, the GS
defendants) and ratings agencies Moody's, The McGraw-Hill Cos. Inc. and Fitch
Inc. (collectively, the rating agency defendants) issued false and misleading
statements concerning the subprime exposure of the mortgage-backed securities
issued in the offering in violation of Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933.
On Jan. 12, 2011, Judge
Harold Baer Jr. granted in part and denied in part the defendants' motions to
dismiss, ruling that MissPERS lacks standing to bring claims against the
Goldman Sachs defendants and failed to properly bring its claims against the ratings
agency defendants for securities it did not purchase.
On Feb. 2, Judge Baer granted
MissPERS's motion to certify a class of all purchasers of "all persons or
entities that purchased or acquired publicly offered certificates of GSAMP
Trust 2006-S2 and who were damaged thereby", and to appoint itself as lead
plaintiff and the Bernstein Litowitz as lead counsel.
MissPERS is represented by
David R. Stickney, Timothy A. DeLange, Elizabeth Lin and Matthew P. Jubenville
of Bernstein Litowitz in San Diego and Bruce D.
Bernstein of Bernstein Litowitz in New
The GS defendants are
represented by Richard H. Klapper, Michael T. Tomaino Jr., Patrice A. Rouse and
Harsh N. Trivedi of Sullivan & Cromwell in New York.
Moody's is represented by
Joshua M. Rubins and James J. Coster of Satterliee Stephens Burke &
Burke. Fitch is represented by Martin Flumenbaum, Roberta A. Kaplan,
Andrew J. Ehrlich and Tobias J. Stern of Paul, Weiss, Rifkind, Wharton &
Garrison. The McGraw-Hill Cos. are represented by Floyd Abrams, S. Penny
Windle, Adam Zurofsky and Tammy L. Roy of Cahill Gordon & Reindel.
All are in New York.
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