Friday, 25 July 2014
Last updated 18 hours ago
Apr 19 2010 | 4:59am ET
Former Paulson & Co. hedge fund manager Paolo Pellegrini was a key source in the Securities and Exchange Commission’s fraud investigation of Goldman Sachs.
Pellegrini, who now runs his own hedge fund, PSQR Management, told the SEC about Paulson’s alleged directing of ACA Management, the third-party firm hired by Goldman to manage the collateralized debt obligation at the center of the lawsuit against the bank, to include residential mortgage-backed securities that Paulson wanted to bet against, CNBC reports. Pellegrini was a key architect of the hugely successful program of shorting subprime mortgages that put the Paulson hedge fund on the map three years ago.
Neither Paulson the firm nor firm founder John Paulson himself have been charged with any wrongdoing in the case. Goldman and one of its executives, Fabrice Tourre, have been charged with defrauding investors to the tune of $1 billion, allegedly misleading them about Paulson’s role in building the CDO.
The SEC was apparently directed to Pellegrini by Paulson himself.
“Paulson & Co. provided the SEC with the names of employees, including Mr. Pellegrini, who might be interviewed as part of the SEC’s inquiry,” Pellegrini said in a statement. “Mr. Pellegrini cooperated fully with the SEC’s inquiry as did a number of his colleagues at Paulson & Co.”
Pellegrini also sought to shoot down speculation that he went the SEC to discredited his former boss.
“Mr. Pellegrini maintains an amicable relationship with Mr. Paulson and remains grateful for the professional opportunities extended to him by Mr. Paulson, for whom he has the highest regard.”
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…