http://www.reuters.com/article/idUSN1614841320100416?type=marketsNews
Paulson might not be guilty of fraud, but what about "Insider trading"
The SEC lawsuit announced on Friday concerns ABACUS, a synthetic collateralized debt obligation that hinged on the performance of subprime residential mortgage-backed securities, and which the regulator said Goldman structured and marketed.
According to the SEC, Goldman did not tell investors "vital information" about ABACUS, including that Paulson & Co was involved in choosing which securities would be part of the portfolio.
The SEC also alleged that Paulson took a short position against the CDO in a bet that its value would fall.
In a statement, Paulson & Co said it did buy credit protection from Goldman on securities issued in the ABACUS program, but did not market the product.
