Goldman Sachs Sued for Fraud Connected with Abacus Cdo’s

ACA Financial Guaranty Corporation is suing Goldman Sachs Group for $30 million in compensatory damages and $90 million in punitive damages, according to a Wall Street Journal article by Liz Moyer. The lawsuit is for fraud and unjust enrichment in connection with bum mortgage backed investments that led to a $550 million Goldman settlement with the SEC, after the investigation exposed how Wall Street created, packaged and sold complex securities at the height of the credit bubble. According to the lawsuit, Goldman Sachs designed the investment vehicle, called Abacus, to fail so that a hedge fund client, Paulson & Company, could reap huge profits by shorting the portfolio while Goldman could rake in huge investment banking fees. ACA said that the Abacus 2007-ACI collateralized debt obligation (CDO) was worthless when it was pitched to ACA.

If you have suffered losses from investments in collateralized debt obligations or other complex packaged securities, please contact our securities law firm for a confidential, no obligation consultation at 1-800-259-9010.

Contact Us
Free Consultation: (800) 259-9010