Goldman, Morgan Named in Lawsuits Tied to Subprime Loans
Investment banks Goldman Sachs and Morgan Stanley said Tuesday they had received official requests for information and had been named in law suits related to their subprime mortgage businesses.
In their annual filings with the U.S. Securities and Exchange Commission, Goldman said it had been asked for information about securitizations, collateralized debt obligations and synthetic products related to subprime mortgages, while Morgan Stanley said it had been asked for information about its origination, purchase, and securitization of subprime and non-subprime residential mortgages.
The investment banks did not specify which agencies had requested the information.
Goldman also said it had been targeted in a Jan. 10 suit filed by the city of Cleveland alleging that its activities in connection with securitizations of subprime mortgages had created a "public nuisance."
Morgan Stanley also said it had been named as a defendant in purported class actions related to its role as an underwriter of certain preferred stock offerings for New Century Financial and Countrywide Financial.