BusinessCompany NewsGoldman Sachs drawn into Fannie Mae lawsuit

Goldman Sachs drawn into Fannie Mae lawsuit

Investment bank named as defendant in lawsuit

Investment bank Goldman Sachs has been named as a defendant in lawsuits
regarding mortgage financier Fannie Mae’s accounting practices.

This was made known in the bank’s quarterly report filed with the Securities
and Exchange Commission.

It joins Fannie Mae and some of the mortgage financier’s past and present
executives, accountants, as well as other financial-services firms facing a
class action and a separate shareholder derivative action.

Goldman Sachs said the complaints allege that it violated laws, including US
securities laws, in arranging some Fannie Mae-sponsored bond deals.

The deals involved real-estate mortgage investment conduits, which are bonds
collateralized with mortgage-backed securities.

In May, regulators fined Fannie May – formally known as the Federal National
Mortgage Association – $400m (£212m), stemming from allegations that its senior
management had manipulated accounting to trigger huge bonuses.

A Goldman Sachs representative was reported as saying the company does
not comment on any pending litigation.

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