According to its latest quarterly filing, Goldman Sachs GroupInc. faces a class action lawsuit over two collateralized debtobligations (CDOs) it packaged and sold in 2006 and 2007, writesthe Wall Street Journal.

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The CDO deals, called Hudson Mezzanine Funding 1 and 2, are $1.2billion of subprime and other residential mortgage-backedsecurities, which were sponsored by subprime mortgage lendersincluding Long Beach, New Century, Fremont, Countrywide, LehmanBrothers and Bear Stearns.

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Similar to an existing lawsuit involving Goldman's AbacusCDOs, the Hudson CDO lawsuit states that Goldman failed todisclose that the securities were structured so that Goldman wouldprofit from its own short positions in subprime mortgages. TheHudson CDOs lost value shortly after they were offered.

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Related: Read "Goldman Sachs litigation update."

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