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On Wednesday, Goldman Sachs Group, Inc. (NYSE:GS) settled a $698 million class action suit by investors who alleged losses from mortgage loan-backed securities by the extinct subprime lender New Century Financial Corp.

The plaintiffs are the Public Employees’ Retirement System of Mississippi and they were represented by David Wales.

Bloomberg reported the proposed settlement announcement came in a letter from Wales on Tuesday, who informed U.S. District Judge Harold Baer that both sides had accepted a settlement offer as proposed by a mediator. The details have not been disclosed but are expected to be included in documents filed by the parties on July 31 asking the judge for settlement approval.

The settlement stemmed from a 2009 suit filed by the Mississippi retirement fund, which alleged that New Century Financial Corp., the originator of the mortgages for the underlying securities, had failed to conform to it underwriting standards and exaggerated the collateral’s value that backed the loans.

How did Goldman Sachs Group, Inc. get involved? It securitized and issued the certificates, according to CNBC. The fund believed that the firm didn’t conduct the proper due diligence when it purchased the loans back in 2005, reported Bloomberg.

New Century went bankrupt in 2007.

In February, Baer had granted the Mississippi fund’s request for a class action suit with 150 investors in the offering as opposed to the plaintiffs acting independently to get their money returned from their 2006 losses..

Next up for the case is the approval of the proposed settlement offer by Baer.

According to Reuters, on Tuesday Goldman was appealing the decision at the time the letter was being written. Neither Tiffany Galvin, a Goldman spokeswoman nor Wales commented on the news.

For Goldman, it isn’t alone in facing these types of claims from investors who suffered from mortgage-backed securities gone wrong.

To date, settlements have included a $315 million agreement in a Merrill Lynch lawsuit, who is now owned by Bank of America Corp (NYSE:BAC), and a $125 million deal from a Wells Fargo & Company (NYSE:WFC) case.

The Public Employees’ Retirement System of Mississippi is supposed to be a sophisticated investment firm. According to SEC regulations, they would not be able to invest in these instruments unless they met certain guidelines. However, it seems that the Court did not deem that as a worthy argument.

It looks like more lawsuits could be coming in the future against banks.

This case is Public Employees’ Retirement System of Mississippi v. Goldman Sachs Group Inc et al, U.S. District Court, Southern District of New York, No. 09-01110.