Paulson May Face Litigation Following Goldman Suit, Whalen Says

Source: BusinessWeek

April 19 (Bloomberg) -- Paulson & Co., the world’s third- largest manager of hedge funds, may face civil litigation for its role in the collateralized debt obligations that led to the fraud charges against Goldman Sachs Group Inc., according to Christopher Whalen.

Billionaire John Paulson’s hedge fund made $1 billion on the CDOs that contributed to the worst financial crisis since the Great Depression. Whalen, a banking analyst at Institutional Risk Analytics in Torrance, California, said that the firm allegations the firm helped shop a package of debt they were actively betting against opened it up to litigation in the wake of the suit by the Securities and Exchange Commission.

“I’m not sure they will escape civil litigation arising from this,” Whalen said in a Bloomberg Radio interview with Tom Keene on April 16. “You can bet the parties who lost money here are going to be seeking redress.”

While buy-side firms don’t often sue their dealers or advisers, the SEC suit will have done most of the legwork and attracted publicity, opening the door for other parties to claim damages, Whalen said.

Read more: http://www.businessweek.com/news/2010-04-19/paulson-may-face-litigation-following-goldman-suit-whalen-says.html

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How sad for them.

end up losing those fortunes. Sometimes they make other fortunes, but the majority of them will die broke.

The Wall Street dirty dealers are no different from a lot of sports or music stars in that regard. With sudden riches often comes a sense of entitlement to live far above one's income in order to show the world just how important one has become.

Likely, a lot of these guys will be sued into the poorhouse even if they manage to stay out of prison. The rest will find out they should have saved instead of using those fat bonuses to leverage debt they now have no ability to pay.

Excuse me while I weep into my hanky.

I would seriously enjoy seeing these charm boys suffer. Think auctioning off all their stuff will turn their children into terrorists?

Wonder what they'll have in the closed casket this time...