ALBANY – The Court of Appeals Thursday reinstated a fraud action against Goldman Sachs & Co. for allegedly inducing an insurer to cover a mortgage-backed security that was designed to fail.

The 5-2 majority reversed a finding by the Appellate Division, First Department, which found in 2013 that ACA Financial Guaranty Corp. failed to establish that it justifiably relied on misrepresentations by Goldman to sustain causes of action for fraud in the inducement and for fraudulent concealment.

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