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Goldman loses bid to dismiss Hudson CDO lawsuit

Posted: March 21, 2012
Source: Reuters
Practice Areas: Securities Litigation

Goldman Sachs Group Inc lost its bid to dismiss a lawsuit accusing it of defrauding investors by selling risky debt linked to subprime mortgages that it planned to bet against.

U.S. District Judge Victor Marrero in Manhattan said the hedge fund Dodona I LLC may pursue nearly all its claims against Goldman, including that the bank recklessly or intentionally sold Hudson Mezzanine Funding collateralized debt obligations to offload subprime risk on unsuspecting investors.

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Lawrence Lederer, a lawyer representing Dodona, called Marrero's decision "extremely well-reasoned, measured, and very substantially supported. We are eager to ultimately try the case on behalf of our client and other investors in the Hudson CDOs."

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