Goldman Sachs Must Face Abacus Suit, New York Court Says
Goldman Sachs Must Face Abacus Suit, New York Court Says
By Chris Dolmetsch - August 18, 2015 — 12:10 PM EDT
Goldman Sachs Group Inc. will have to defend in court against an investment insurer’s claims that it lied about billionaire John Paulson’s position in a security known as Abacus.
An appeals court in Manhattan ruled Tuesday ACA Financial Guaranty Corp. can pursue the lawsuit because its claim meets all the state law requirements for fraud allegations.
ACA, a New York-based investment insurer, claims Goldman tricked it into backing the collateralized debt obligation known as Abacus by saying Paulson and his hedge fund had bet the portfolio would succeed when in fact they were wagering it would fail. ACA sued Goldman Sachs for $120 million in damages in 2011 and added Paulson as a defendant in 2013.
ACA’s suit “contains a rational basis for inferring that the alleged misrepresentations were made intentionally,” the appeals court said Tuesday....
Read more:
http://www.bloomberg.com/news/articles/2015-08-18/goldman-sachs-must-face-abacus-cdo-suit-new-york-court-says
The relationship between Goldman Sachs & their billionaire client John Paulson extends beyond just this lawsuit stemming from the US financial meltdown.
Paulson also bet against the Greek debt that Goldman Sachs helped hide in the early 2000's.
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