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
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