Tags: Paulson | ACA | Goldman | suit

Paulson Named as Defendant in Revised ACA Goldman Sachs Suit

Wednesday, 02 Jan 2013 05:27 PM

 

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Hedge fund Paulson & Co. was named as a defendant in a proposed revised lawsuit by ACA Financial Guaranty Corp. against Goldman Sachs Group Inc. over a collateralized debt obligation called Abacus.

Paulson conspired with Goldman Sachs to deceive ACA Financial, which provided financial guaranty insurance for the deal, ACA Financial said in papers filed Wednesday in New York State Supreme Court in Manhattan. ACA Financial is seeking permission to file a revised complaint adding Paulson as a defendant.

Goldman Sachs in July 2010 won court approval of a $550 million settlement with the U.S. Securities and Exchange Commission over claims that it misled investors in the Abacus CDO. Goldman Sachs failed to disclose New York-based Paulson’s role in selecting underlying securities or that Paulson had taken a short position against the CDO, the SEC said.

State Supreme Court Justice Barbara Kapnick ruled in April that ACA Financial’s claims against New York-based Goldman Sachs should proceed.

Armel Leslie, a spokesman for Paulson, didn’t immediately comment on the revised complaint.

The case is ACA Financial Guaranty Corp. v. Goldman Sachs & Co., 650027-2011, New York State Supreme Court (Manhattan).

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