Goldman to face Abacus lawsuit

Goldman Sachs 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.

Bloomberg News reports that an appeals court in Manhattan ruled Tuesday ACA Financial Guaranty can pursue the lawsuit because its claim meets all the state law requirements for fraud allegations.

ACA, an 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 $120m 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.

To access the complete Bloomberg News article hit the link below:

Goldman Sachs Must Face Abacus Suit, New York Court Says

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