Paulson Added To Goldman CDO Lawsuit

Jan 3 2013 | 11:43am 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

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Rolling Art Advisors Marketing Collectible Car Fund As Uncorrelated Alternative

Aug 27 2015 | 6:47pm ET

A new fund is trying to provide investors with greater access to an emerging asset...

Guest Contributor

FATCA for Hedge Funds: Eight Common Pitfalls

Sep 1 2015 | 10:56am ET

FATCA is now a way of life for those in the financial industry and most professionals...

 

Editor's Note