NY court resurrects bond insurer suit against Goldman Sachs

Staff Writer
Columbus CEO

ALBANY, N.Y. (AP) — A ruling from New York's highest court means a bond insurance company's lawsuit against Goldman Sachs can continue.

ACA Financial Guaranty Corp. is seeking $120 million in damages in the lawsuit, which alleges Goldman Sachs "fraudulently concealed" details about a subprime mortgage-backed investment product that later cost ACA hundreds of millions of dollars.

The Court of Appeals in a 5-2 decision Thursday reversed a lower-court ruling that had dismissed the case.

ACA's lawsuit says Goldman Sachs hid knowledge that a hedge fund investing in the product was betting on it to fail.

A Goldman Sachs spokesman calls Thursday's ruling a disappointment but says the firm is confident ACA's legal claims will be unsuccessful.