Insurer sues bank adviser over US mortgage guarantees
Liberty Mutual is suing Goldman Sachs for making “materially misleading statements and omissions” about the financial condition of Fannie Mae during two stock offerings by the US mortgage backer, the Times reports.
Liberty Mutual invested $62.5m in the September and December 2007 share sales, which were underwritten by Goldman.
“As a result of [Liberty’s] reliance on Goldman Sachs’ material misrepresentations, [the] investments are virtually worthless,” the insurer said in its filing. Liberty wants compensation from the bank for the money it lost after Fannie Mae was taken into government ownership.
Goldman said that the claim was without merit. “We will contest it vigorously,” a bank spokesman said.
