Posts Tagged ‘ACA Capital’

Strange Twists in Goldman Sachs Fraud Case

April 20, 2010

Chidem Kurdas

From the Securities and Exchange Commission’s claim, “Goldman Sachs failed to disclose to investors vital information …. in particular the role that a major hedge fund played in the portfolio selection process,” you might think that John Paulson, the manager of  the hedge fund in question, was Goldman’s secret partner in the subprime mortgage-based collateralized debt obligation called ABACUS 2007-ACl.

In fact, Goldman introduced Paulson & Co. to the main party in the deal, ACA.  Mortgage-backed securities specialist ACA Management picked the underlying securities for the portfolio; its parent, bond insurer ACA Capital, took on the credit risk by insuring the notes. (more…)