Wednesday, 24 December 2014
Last updated 11 hours ago
Jan 7 2011 | 8:53am ET
The largest investor in a controversial Goldman Sachs collateralized debt obligation has sued the firm, which the Securities and Exchange Commission accused last year of misleading it about the role of hedge fund Paulson & Co. in the CDO.
ACA Financial Guaranty said it was "misled by Goldman's fraudulent activities" and alleged that the CDO, called ABACUS-2007-AC1 was already "worthless" when Goldman marketed it to ACA. ACA bought millions of dollars worth of Abacus notes and insured part of the portfolio for $909 million.
In its own lawsuit against Goldman filed in late 2009—settled in May for $550 million—the SEC accused the Wall Street giant of hiding Paulson's role from ACA. The agency alleges that the CDO was structured and marketed on behalf of Paulson, which shorted it, earning about $1 billion in profits.
An ACA unit, ACA Management, was employed by Goldman to select the residential mortgage-backed securities to go into the CDO. Paulson, which has not been accused of wrongdoing in the case, allegedly suggested 123 RMBS, of which ACA rejected 68.
ACA is seeking $120 million in damages in its suit, filed yesterday in New York state court.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.