In a lawsuit filed Thursday in U.S. District Court in Boston, Liberty Mutual said it deserves to be reimbursed for losses on the $62.5 million of Fannie Mae preferred shares it bought in late 2007 through offerings underwritten by Goldman.
The insurer said Goldman knew of "significant problems" in subprime and other risky mortgages in late 2006 and throughout 2007, and generated large profits for itself by betting against the market.
A Goldman spokesman told Reuters in an email that the bank considers the suit "entirely without merit" and that Goldman "will contest it vigorously."