German Bank's Suit Against Goldman Sachs Moves Forward
Commercial Litigation Insider
March 12, 2014
Mark Arisohn successfully argues that RMBS case against Goldman Sachs is not time-barred under German law
A Manhattan state judge rejected defense counsel's attempts to argue that DZ Bank's fraud claims are time-barred under German law. The dispute arose from the bank's $179 million purchase of certificates in mortgage-backed securities prior to the U.S. housing crisis.
Goldman Sachs alleges that as a sophisticated financial institution that specializes in asset securitizations, Germany's fourth-largest bank should have realized by 2007 and 2008 due to prolific coverage in the media on subprime mortgage loans that it had a further duty to investigate potential fraud claims.
Plaintiff's counsel and Labaton Sucharow partner Mark Arisohn argued in response that such media reports did not outright state, "Goldman Sachs lied."
"Of course, [Goldman Sachs] was in the news a lot and [the focus of] uncomplimentary material, but you'll not find a single article or lawsuit that Goldman Sachs committed fraud in relation to these certificates or did so with scienter," he argued to the court.
Arisohn said he was not surprised by the direction the judge took in light of recent rulings on similar matters.