Larger Investors Join In MBS/CDO Fray Against Wall Street

Sophisticated institutional investors join the masses filing claims against Wall Street financial institutions for fraud in the sale of mortgage backed securities (MBS), collateralized debt obligations (CDO) and related exotic investments, according to a Wall Street Journal article. The latest to join in the fracas is Charles Schwab Corporation, who is suing Goldman Sachs for making material misrepresentations or omissions regarding the sale of mortgage related securities.

It was reported in the article that Goldman disclosed in its annual report that there were some $457 million in losses from mortgage related securities as of December 2010. Some of the plaintiffs seeking recovery from Goldman include Schwab, the Federal Home Loan Banks of Seattle, Chicago and Indianapolis, Cambridge Place Investment Management, Inc. Basis Yield Alpha Fund and Landesbank Baden-Wurttemberg. Reportedly, Goldman is expecting many more lawsuits and claims related to mortgage related securities, loan sales, CDO and foreclosure practices.

If you have sustained losses in MBS, CDO or other exotic investments, contact our securities law firm for a confidential consultation at 1-800-259-9010.

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