Insurer Claims Goldman Misrepresented Failed $325M CDO

Law360, New York (December 5, 2012, 6:42 PM EST) -- CIFG Assurance North America Inc. on Tuesday lodged a suit in New York state court accusing Goldman Sachs & Co. of tricking the company into providing a financial guaranty insurance policy on a $325 million collateralized debt obligation containing toxic residential mortgage-backed securities.

Goldman promised CIFG that collateral for the obligation, which was called Fortius II Funding Ltd., would be selected by a manager acting independently and in the interest of investors, according to the suit. Instead, Goldman hired Aladdin Capital Management LLC and convinced the...
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