Actually, it was $123 million of mortgage-backed securities which, once again, are at the heart of a case against the Goldman Sachs Group.  The Allstate Corp. accuses Goldman of providing documents that "contained untrue statements and omitted material facts" about the quality of mortgages packaged in securities that were issued between 2006 and 2007, just before the housing collapse crushed the value of such assets.

Allstate further alleges that Goldman internally referred to the securities as "junk," "dogs," "crap," and "lemons" - characterizations that came to light in governmental investigations.  [C-I:  Let's not forget that, in 2010, Goldman agreed to a $550mn SEC fine related to the firm's infamous Abacus deal.]    Allstate further stated in its complaint that Goldman described the mortgage-backs as low-risk and in compliance with strict underwriting criteria, even though the bank knew lenders had abandoned underwriting guidelines. 

Allstate's Busy Court Calendar.   It's the ninth lawsuit by Allstate over mortgage-backed securities, including one against Countrywide involving over $700mn in securities.  Others include Morgan Stanley, JPMorgan and Merrill Lynch.  

[C-I Note:  At this point in time, after so many lawsuits involving billions of dollars, one would be right in asking:  What individual or committee ran investments for Allstate and why were they so "out of the loop" on mortgage-backs?  Taken another way, to what extent might investment ineptitude - on the part of Allstate's CIO - have played in the company's purchases of such a large portfolio of ... 'junk', 'dogs', 'crap' or 'lemons' securities?  And has that individual or members of the committee been terminated?]   [AP, 8/16/11]