ABP Settles RMBS Suit with Goldman Sachs

(April 19, 2013) -- Dutch pension giant ABP has settled out of court with investment bank Goldman Sachs on a case brought over the sale of residential mortgage-backed securities (RMBS) between 2005 and 2007.

The settlement is the latest agreed by Europe's largest pension fund around its RMBS purchases. In February, ABP settled with Deutsche Bank and in December with JP Morgan on the same issue.

ABP said it had commenced this action, independent of existing class actions brought against the bank on the RMBS matter, in January last year by filing a complaint against the Goldman Sachs entities involved in the securitization and sale of the certificates, and a number of individual defendants, in New York Supreme Court.

ABP alleged that it had "purchased certain RMBS in reliance on false and misleading statements and that these securities were far riskier than had been represented, backed by mortgage loans worth significantly less than had been represented".

Goldman Sachs has denied and continues to deny these claims.

Henk Brouwer, chairman of ABP said: "In 2011 ABP initiated litigation relating to a number of RMBS cases. We now are pleased to see that these cases are concluded satisfactorily one by one. We have full confidence that all will be completed in due course, evidencing that all parties involved are looking to the future leaving past grievances and practices behind them."

Along with the case against Deutsche Bank, this year, the fund has also settled a case brought against pharmaceutical company Merck.

Related content: Power 100 #9 Angelien Kemna - CIO APG