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From the GS Whistleblower Website:
The case alleges Goldman Sachs promotion and sale of approximately $92 billon of ” certificates,” a type of mortgage-backed security that entitles its owner to a portion of the revenue stream generated by an underlying pool of residential mortgage loans, in purportedly securitized MBS trusts that were not backed by any collateral. These trusts, which were represented in the Defendant’s contracts and offering documents as containing mortgage notes and deeds of trust, did not, in fact, contain all such required mortgage notes and deeds of trust.
Even though Defendant represented the trusts as containing mortgage notes and deeds of trust, they did not, in fact, contain all such required mortgage notes and deeds of trust and/or were not supported by the appropriate documentation to establish the trust, including, without limitation, all such required security/collateral. Moreover, as alleged more specifically below, some or all of these trusts, which were represented in Defendant’s contracts and offering documents as Real Estate Mortgage Investment Conduit (REMIC”) trusts, were flawed at inception and did not meet the definitional and/or timing requirements to be REMIC trusts. As a result of Goldman’s wrongful and fraudulent actions, upon which California justifiably relied, California purchased what were purported to be, but in reality were not, securities backed by a pool of mortgage notes.
