IKB Considering Further Legal Action Vs Goldman Sachs -Source

16th Jul 2010 12:13

By Madeleine Nissen Of DOW JONES NEWSWIRES FRANKFURT (Dow Jones)--Germany's IKB Deutsche Industriebank AG (IKB.XE) is considering further legal action against U.S. bank Goldman Sachs Group Inc. (GS), a person familiar with the matter said Friday. "IKB is carefully examining further claims--knowing how difficult it is to nail Goldman Sachs down to facts," the person said. "In the Abacus transaction there were a couple of emails that helped prove the misconduct of Goldman Sachs." In the other cases, it is much more difficult to prove alleged misconduct, so that IKB would think twice before taking on the risk of litigation, the person added. IKB, now owned by U.S. private equity fund Lone Star Funds, was one of the investors in Abacus, a synthetic collateralized debt obligation that was marketed by Goldman Sachs. Abacus has become the focal point of a U.S. Securities and Exchange Commission probe into Goldman Sachs on allegations about the investments were marketed. The SEC said Thursday it had reached a $550 million settlement with Goldman Sachs that will resolve its lawsuit against the firm alleging that it misled investors in the Abacus 2007-AC1 subprime mortgage product. Of the $550 million, approximately $100 million will be paid to Royal Bank of Scotland Group PLC (RBS), with another $150 million going to IKB. The SEC sued Goldman in April, charging it with fraud in the marketing of Abacus 2007-AC1 that was based on mortgage-backed securities. The suit is the highest profile of a number of inquiries regulators are making into synthetic collateralized debt obligations. -By Madeleine Nissen, Dow Jones Newswires; +49 69 29725 500, [email protected] (END) Dow Jones Newswires July 16, 2010 07:13 ET (11:13 GMT)