Insurers continue to file lawsuits against large investment banks over losses taken during the housing market collapse, as Liberty Mutual Insurance Co. filed suit against Goldman Sachs; and Allstate announced a lawsuit against Morgan Stanley.
In their complaint, Liberty Mutual and several subsidiaries say Goldman Sachs misled them in a preferred-stock offering for Federal Home Loan Mortgage Corp. (Freddie Mac) late in 2007.
Liberty Mutual invested $37.5 million in the offering. The investment is "virtually worthless," says the complaint, which alleges Goldman violated state and federal securities laws.
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