Goldman, Sachs & Co. developed and sold the CDO on behalf of hedge-fund client Paulson & Co. in 2007, according to the complaint filed by ACA today in New York state Supreme Court in Manhattan.
“This fraud action arises from the egregious conduct of Goldman Sachs,” according to the complaint. ACA claimed the CDO was “designed to fail so that Paulson could reap huge profits by shorting the portfolio and Goldman Sachs could reap huge fees.”