German Bank Flays Goldman Over $37M CDO Sale

Law360, New York (October 5, 2010, 6:21 PM EDT) -- Germany’s state-owned Landesbank Baden-Wurttemberg has accused Goldman Sachs & Co. of fraud in connection with the sale of $37 million of doomed mortgage backed securities.

The complaint, lodged Monday in the U.S. District Court for the Southern District of New York, claims Goldman and investment advisor TCW Asset Management Co. touted the collateralized debt obligations as virtually risk free while secretly banking on the imminent failure of the investments.

Goldman is liable for promoting the Davis Square Funding VI CDO as a watertight investment, leading Landesbank...
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