Paulson Pledges To Pay Legal Fees In Goldman Case

Apr 26 2010 | 3:41pm ET

He and his firm are all over the Securities and Exchange Commission lawsuit accusing Goldman Sachs of fraud, but neither John Paulson nor his firm have been charged with any wrongdoing. If that changes, however, one thing Paulson & Co. investors won’t have to worry about are legal bills.

The New York-based hedge fund, which manages $32 billion, has pledged to cover any legal fees stemming from the collateralized debt obligation at the heart of the Goldman case. The Wall Street giant is accused of misleading investors about Paulson’s role in choosing the securities that went into the CDO, as well as its bet against the CDO.

In a letter to investors on Wednesday, Paulson expressed confidence that the firm won’t be hit with “legitimate causes of action.” But he said they are prepared nonetheless.

“We do operate in a litigious environment, and there are no guarantees that we will not be named in an action,” he wrote.

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