Goldman Sachs Paulson SEC Case
Paulson Linked to SEC's Lawsuit Against Goldman Sachs
Ultimately, though, the biggest beneficiary of the transactions was Paulson & Co. The SEC's complaint, filed in federal court in New York, said the hedge fund first helped to pick the mortgage bonds that were bundled into the complex securities and then profited to the same extent the other investors lost, pocketing $1 billion, by betting against the very mortgages that burned the investors.
The SEC said it was improper not to tell the investors that they'd purchased securities assembled for Goldman Sachs by people who had then shorted the same investment.
In a statement, Paulson & Co. said it "is not the subject of this complaint, made no misrepresentations and is not the subject of any charges."
During a news conference, SEC enforcement director Robert Khuzami responded to a question about Paulson's role by saying: "Look, we charged those that we feel appropriate."
"It was Goldman that made the representations to investors," Khuzami said. "Paulson did not." Source
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