Paulson: On the hook?
By Lawrence Delevingne
Wed Apr 21, 2010
Weighing Paulson & Co.’s legal liability in the SEC’s Goldman Sachs case, including potential multi-billion dollar RICO claims from losing investors.
Paulson & Co. Inc. wasn’t charged in the
Securities and Exchange Commission’s allegations
of securities fraud against Goldman Sachs, but the powerful
hedge fund is still attracting unwanted attention for helping
shape a mortgage-backed security in 2007 that made it $1
billion—and cost other investors the same amount.Some
legal experts believe that Paulson could still be sued for its
role in creating and betting against a synthetic collateralized
debt obligation called ABACUS 2007-AC1, including Racketeer
Influenced and Corrupt Organizations Act claims potentially
worth billions of dollars. For now, Paulson appears safe. SEC
enforcement chief Robert Khuzami recently said, according to
the Wall Street Journal, that the hedge fund was not charged
because only Goldman was responsible for representing the
security to investors.And Paulson has said there’s
been no notice of impending civil litigation...
ISSN: 2151-1845 / CDC10004H
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