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Source: Reuters

Ex-Paulson manager assisted US SEC in Goldman case

Published: 18 Apr 2010 17:30:49 PST

WASHINGTON, April 16 - Paolo Pellegrini, who co-managed hedge fund firm Paulson & Co.'s credit opportunities funds, cooperated with the U.S. Securities and Exchange Commission in its case against Goldman Sachs, a source familiar with the matter said on Friday.

Earlier, the SEC charged Goldman with fraud in the structuring and marketing of a debt product tied to subprime mortgages. The SEC alleged that Paulson & Co worked with Goldman in creating a collateralized debt obligation and stood to benefit as its value fell.

New York-based Paulson & Co correctly bet that housing prices would fall in 2007, which helped transform the firm into one of the industry's most successful. Pellegrini had been instrumental in the bet, but split from Paulson in 2008, becoming the only person to leave the firm that year. He has now set up his own hedge fund. A spokesman for Pellegrini had no immediate comment.

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