Paulson Added To Goldman CDO Lawsuit

Jan 3 2013 | 12:43pm ET

Paulson & Co. has been sued for its role in a controversial Goldman Sachs collateralized debt obligation.

ACA Financial Guaranty Corp., which invested in and insured the CDO, Abacus-2007-AC1, added Paulson as a defendant in its lawsuit against Goldman, filed two years ago. ACA alleges that the hedge fund "at a bare minimum…gave Goldman Sachs substantial assistance in achieving the fraud."

According to ACA, Goldman misled it about Paulson's role in selecting the securities that went in to Abacus. The company claims the CDO was already "worthless" when Goldman marketed it to ACA.

According to the Securities and Exchange Commission, Abacus was structured and marketed on Paulson's behalf, and the hedge fund was shorting it. Paulson called ACA's amended complaint "completely without merit."

"As there is no basis in law or fact for the proposed amendment, Paulson will defend itself against this baseless action if the amendment is allowed," spokesman Armel Leslie said.

ACA had sought $120 million from Goldman.


In Depth

Q&A: Fund Administration Comes To The Cloud

Jul 14 2017 | 7:23pm ET

The fund administration sector has been steadily implementing new technology, such...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Rastegar: PE Real Estate Gains Momentum as Uncertainty Rises

Jul 21 2017 | 6:04pm ET

The steady march of equity markets and fundamental shift in the direction of Fed...

 

From the current issue of