It’s highly unlikely that Paulson would face any substantive legal charges for his involvement in structuring ABACUS, but he’s preparing for the event just in case.
On April 21st, Paulson sent out a letter to investors to explain to jittery investors what would happen if he were named by someone other than the SEC.
AR got the letter, in which Paulson writes, “I’ve made the decision that any legal fees or liabilities associated with any litigation regarding ABACUS 2007-AC1 will be borne by Paulson & Co. Inc. and not by the investors in any of the funds.”
It’s only a slight chance that those who lost money could file suit against Paulson (they might employ RICO, a statute generally associated with organised crime and securities fraud), but as Paulson says, the times are “litigious.”
“We do operate in a litigious environment, and there are no guarantees that we will not be named in an action. In the event we are named as a defendant, we will immediately file a motion to dismiss, and we are confident that the action would be dismissed.”
Paulson continues to vigorously defend his role in the SEC case against Goldman. This letter is just more evidence that he’s sure he did nothing wrong. Paulson is reassuring investors that if he were named, he’d do exactly what would be expected of him and cover all legal fees.
Find out what Paulson’s role in ABACUS was for yourself in the timeline of the deal –>
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