Paulson & Co. appealed state court judge to dismiss the lawsuit filed against it by ACA Financial Guaranty Corp, accusing it of conspiring with Goldman Sachs. Paulson & Co. said it not have a role in how the deal was structured, marketed or sold to investors. Paulson & Co. said it made no misrepresentations to ACA about Abacus. ACA sued Goldman Sachs in 2011 and in January 2013 added Paulson & Co. and Paulson Credit Opportunities Master II as defendants. ACA is looking to recover $120 million in compensatory and punitive damages.

New York Community Bancorp Inc. (NYCB) held informal discussions to acquire One West Bank Group LLC, three sources told Reuters this week. Funds managed by John Paulson and George Soros, owners of One West, have been planning an initial public offering (IPO), but could opt for a sale if they get a good price, according to the sources, which declined to be named because they are not allowed to speak to the media. One West held talks with a handful of banks, but NYCB is the only ongoing suitor they identified. NYCB is concerned about the quality of the mortgages of One West, sources added. Reuters added that One West, Paulson & Co. Inc., Soros Fund Management LLC and NYCB declined to comment.

ACA Financial Guaranty Corp. filed an amended complaint naming Paulson & Co. Inc. (Paulson & Co) and its hedge fund Paulson Credit Opportunities Master II Ltd. as defendants in a $120 million lawsuit it brought against The Goldman Sachs Group, Inc. (Goldman) in 2011. The lawsuit centers on a collateralized debt obligation known as Abacus, which ACA claimed was designed to fail so that Paulson could reap 'huge profits' and Goldman 'huge fees'. The amended complaint contains new allegations that Goldman and Paulson deceived ACA into believing Paulson was investing in the CDO, when they knew he would instead bet against it by taking a short position. It alleges that Goldman misrepresented that Paulson's and ACA's financial interests in Abacus were 'aligned', and that Paulson fraudulently played the role of the 'equity investor'. The complaint quotes a Jan. 17, 2007, telephone conversation in which a Goldman managing director announced that Paulson's interest in the 'capital structure' of Abacus was 'all, 100% equity'. Goldman and Paulson also secretly agreed in what they called a 'side letter agreement' to structure the deal in a way that concealed Paulson's short interest, the new complaint said. Goldman Sachs settled with the U.S. Securities and Exchange Commission in 2010 over claims it misled investors in Abacus, without admitting wrongdoing. The SEC claimed Goldman and vice president Fabrice Tourre failed to tell investors Paulson & Co. helped choose and bet against the subprime residential mortgage backed securities underlying Abacus.