The testimony of a former Paulson & Co official, Paolo Pellegrini, could undercut the Securities and Exchange Commission’s fraud case against Goldman Sachs, CNBC has learned.
Pellegrini, testified that he told ACA Management, the main investor in a Goldman mortgage-securities transaction, that Paulson intended to bet against – or short – the portfolio of mortgages ACA was assembling.
“If true, the testimony would contradict the SEC’s claim that ACA did not know Paulson was hoping the mortgage securities would fail and weaken charges that Goldman misled investors by not informing ACA of Paulson’s position,” said the CNBC report.
Importantly, neither Pellegrini nor Paulson & Co has been accused of wrongdoing.
Source: CNBC, April 21, 2010.
