Kasowitz Urges Appellate Court to Reinstate ACA Financial Guaranty Suit Against Goldman Sachs
Marc Kasowitz appeared in front of the New York Court of Appeals in Albany on Thursday on behalf of ACA Financial Guaranty Corp., a New York-based bond insurer, and urged the court to reinstate a $120 million fraud suit accusing Goldman Sachs Group Inc. of deceiving ACA into believing hedge fund Paulson & Co. was a long investor in the collateralized debt obligation known as Abacus, when both the bank and the hedge fund knew that Paulson was betting Abacus would fail.
As Kasowitz explained to the state’s top court, Goldman failed to disclose the “essential fact” that billionaire John Paulson and his hedge fund were short sellers of the securities in the Abacus CDO, while telling the bond insurer they were betting the portfolio would succeed. According to Kasowitz, “There was concealment all the way through. This was all part of a plan by Paulson in order to cash in to the tune of $1 billion on its view that the subprime market was going south.”