Main Investor in Goldman Deal May Have Caused Losses

ACA Management, the main investor in a failed mortgage-securities deal that prompted securities fraud charges against Goldman Sachs, appears to have caused at least some of the $1 billion loss itself, CNBC has learned.

ACA, which selected the mortgage portolio along with hedge fund Paulson & Co, suggested securities that ended up lowering the quality of the deal. While ACA apparently thought the securities would improve the portfolio, experts contacted by CNBC say it had the opposite effect.

The revelation is a further blow to the Securities and Exchange Commission's civil fraud suit against Goldman. The agency contends Goldman didn't tell investors in the mortgage portfolio—including ACA—that Paulson was not only picking some of the securities but betting against—or shorting—them.

Read Full Article from CNBC

- Posted: 2010-04-22 10:57:48

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