Citigroup, Goldman, and UBS settle lawsuit

Gavel

Citigroup, Goldman Sachs and UBS have agreed to pay $235 million to settle a lawsuit over mortgage-backed securities issued by defunct Residential Capital LLC.

Bloomberg News reports that the three banks reached the agreement with investors led by the New Jersey Carpenters Health Fund, the union fund said in court papers Friday.

The investors sued in 2008, alleging the banks failed to disclose that they’d disregarded guidelines in underwriting the securities.

The damage claims were based on losses when the investments were downgraded, causing the value of the securities to collapse. The settlement must be approved by U.S. District Judge Katherine Failla in Manhattan before it can take effect.

Hit the link below to access the complete Bloomberg News article:

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