Goldman Sachs Group reached a class settlement with investors in a $698 million mortgage-backed securities offering, a lawyer for the plaintiffs told a U.S. District Court judge in New York.
David Wales, who represents the $19.4 billion Mississippi Public Employees' Retirement System, Jackson, told U.S. District Court Judge Harold Baer in a letter made public Tuesday that both sides had accepted a settlement proposed by a mediator. Details of the agreement weren't disclosed.
Mr. Wales said the parties will file papers by July 31 asking Mr. Baer to approve the settlement.
The Mississippi pension fund sued in 2009, claiming New Century Financial, which originated the mortgages underlying the securities, failed to adhere to its underwriting standards and overstated the value of the collateral backing the loans. The pension fund claimed Goldman Sachs didn't conduct proper due diligence when it bought the loans in 2005.
Mr. Baer in February granted a request by the Mississippi retirement system to represent a class of more than 150 investors in the offering.
Michael DuVally, a Goldman Sachs spokesman, declined to comment on the settlement.