Shares of Goldman Sachs (GS) are up $2.29, or 1.4%, at $162.27, after CNBC this morning said it’s following up on reports the Securities & Exchange Commission has received testimony that “appears to contradict the government’s case” against Goldman.
According to government documents, CNBC reports, a Paulson & Co. official, Paolo Pellegrini, was asked by a government attorney, “Did you tell [ACA Capital Management executive Laura Schwartz] that you were interested in taking a short position in Abacus?” and Pellegrini responded “Yes,” suggesting that perhaps ACA was aware of Paulson & Co. shorting the deal.
This follows a piece by CNBC’s Scott Cohn on Squawk Box reporting on a letter from John Paulson’s Paulson & Co. sent to its investors yesterday. The firm points out that at the time of the Goldman Abacus CDO, mortgage-backed securities were viewed as being quite safe, implying there was little reason to worry about a short-seller being on the other side of a trade.
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