| NEW YORK, March 18
NEW YORK, March 18 Paulson & Co asked a judge to
dismiss a lawsuit accusing the firm of conspiring with Goldman
Sachs Group Inc to get a bond insurer to guarantee
payments on an investment allegedly designed to fail.
In a filing in New York on Monday, Paulson said it "made no
misrepresentations" to ACA Financial Guaranty about
the collateralized debt obligation known as Abacus.
ACA brought the $120 million complaint against Goldman in
2011 and amended its lawsuit in January, adding Paulson & Co and
its hedge fund, Paulson Credit Opportunities Master II Ltd, as
The amended complaint claims Goldman and Paulson deceived
ACA into believing Paulson was investing in the CDO. Paulson
eventually took a short position on the CDO.
Paulson said it had nothing to do with how Goldman offset
its risk or how Abacus was sold to investors.
"By its nature, a synthetic CDO like Abacus must have a long
and a short," Paulson said in its filing. "Paulson entered into
a credit default swap with Goldman to take a short position on
it. Paulson's obligations ended there."
ACA relies on "mischaracterizations, emails unrelated to
Abacus, and snippets of correspondence taken out of context,"
Michael DuVally, a spokesman for Goldman, declined comment.
Goldman settled with the U.S. Securities and Exchange
Commission for $550 million in 2010 over claims it misled
investors in Abacus, without admitting wrongdoing.
The case is ACA Financial Guaranty Corp v Goldman Sachs &
Co, 650027/2011, New York state Supreme Court (New York County).