3 ms·
Please read the complaint (relevant part starts on p.9). This has nothing to do with Paulson's superior research. This is Paulson telling ACA which RMBS to put
by dsplittgerber 17y ago
Please read the complaint (relevant part starts on p.9). This has nothing to do with Paulson's superior research. This is Paulson telling ACA which RMBS to put into the portfolio, ACA signing off on it, and GS telling investors that ACA selected the portfolio, which it did not.
GS structured this whole deal from the beginning because Paulson wanted to short specific RMBS portfolios; ACA was just engaged in order to have a "brand-name" signing off on it.
- jamiequint 17y agowarfangle was talking about the representation of the products. Yes, they misrepresented who put them together, but they were completely up front about the underlying assets. In fact you can see in the pitch deck (http://www.scribd.com/doc/30036962/Abacus-2007-Ac1-Flipbook-20070226 http://www.scribd.com/doc/30036962/Abacus-2007-Ac1-Flipbook-...) on slides 56 and 57 a list of the assets the CDO was based off of.
- anigbrowl 17y agoThis is true, but it must be balanced against: a) the ~32 slides (almost 50%) explaining why ACA was such a reliable and reputable sponsor of the issue, and b) the fact that ACA's participation was secured with the help of blatantly false statements from GS VP Fabrice Tourre about Paulson's intended positions in those assets (which were represented to ACA as long when they were actually short). ACA thought that Paulson & Co. were going to buy the equity (riskiest) tranche, and that they, ACA, were only taking on the risk of the mezzanine tranches. GS knew that not only did Paulson not intend to buy in, they intended to bet against the CDO.