ACA Capital Sues Goldman

Fox’s Charlie Gasparino reports that “ACA Capital is suing Goldman Sachs (GS) for 120 million dollars for in compensatory and other damages” over the ABACUS deal. ACA Capital is alleging that Goldman Sachs “told ACA Paulson was long on the ABACUS investment” when it is known for a fact he was short.

Here are the key highlights from the report, courtesy of Fox Business Network:

On the lawsuit filed by ACA Capital against Goldman Sachs:
“FOX Business Network has learned on of the investors, ACA Capital is suing Goldman Sachs for 120 million dollars for in compensatory and other damages. The lawsuit does follow the SEC case pretty closely. It says ACA had no idea that John Paulson, the big hedge fund guy, that he was actually putting together this deal and shorting this deal. Where it goes further than the SEC case is they have emails where Goldman Sachs is clearly in the loop with ACA and ACA is clearly under the belief that Paulson is long the portfolio, not short and what these emails show is that Goldman did not correct ACA Capital in this belief.”

On ACA Capital’s allegations against Goldman Sachs:
“I spoke with Marc Kasowitz the attorney for ACA Capital. He said ‘we have documents that show Goldman Sachs told ACA Paulson was long on the ABACUS investment.’ That takes it a step further that there are documents where Goldman explicitly is telling ACA Capital that Paulson is long when in fact we all know that he is short.”