NY Ruling Against Goldman Pokes Hole In Diligence Defense

Law360, New York (May 8, 2013, 7:58 PM EDT) -- In rejecting Goldman Sachs & Co.'s argument that a bond insurer that sued for fraud should have checked a $275 million portfolio of bad mortgages loan-by-loan, a New York appeals court has limited the power of banking-industry defendants to knock out subprime suits simply by arguing that a plaintiffs' due diligence wasn't adequate, experts said.

Their comments came a day after a unanimous, five-judge appellate panel of the New York Supreme Court's First Department said a trial judge went too far when he threw out CIFG...
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