The Goldman Sachs Group, Inc. won dismissal of fraud claims brought by a bond insurer over a CDO tied to subprime mortgage securities called Abacus. The New York state appeals court dismissed a complaint by ACA Financial Guaranty Corp. accusing Goldman of fraudulently inducing the company to insure the CDO, or collateralized debt obligation. ACA Financial claimed Goldman deceived it into believing Paulson & Co., a hedge fund run by John Paulson, was a long investor in the Abacus CDO, when it knew Paulson would take a short position. In its ruling, the appeals court said ACA could have asked Paulson & Co. what position it intended to take. ACA brought claims against Paulson for fraud, like those against Goldman, and added a claim for aiding and abetting fraud. A motion by Paulson to dismiss that complaint is pending.

Goldman Sachs Group Inc. face fraud claims brought by CIFG Assurance North America over insurance it provided for $275 million in mortgage-backed securities, a New York state appeals court ruled on May 7, 2013. CIFG claimed in a 2011 lawsuit that the investment bank fraudulently induced it to provide insurance for a portfolio of more than 6,000 subprime residential mortgages by concealing the shoddy quality of the loans. A trial judge in Manhattan threw out that claim last year, ruling that CIFG would have uncovered the alleged misrepresentations had it performed proper due diligence. The New York State Supreme Court's Appellate Division, First Department, reversed finding that CIFG had done enough by having an outside consultant analyze the loans. The ruling also revived fraud claims against M&T Bank Corp. that sold the loans to Goldman. In that case, JPMorgan had asked a New York judge to dismiss similar fraud claims but agreed to hold off until the First Department ruled in the CIFG case.

Goldman Sachs Group Inc. has named Julian Salisbury to become head of its Global Special Situations Group, as current head Jason Brown retires, according to memos sent on May 1, 2013. Mr. Salisbury, a partner and managing director who now heads the group's European operation, will move from London to New York for the role. Mr. Brown, who is also a partner and managing director based in Asia, took over leadership of the operation in 2011 when its previous head, Richard Ruzika, retired. Mr. Ruzika had been global head of commodities trading and a close friend of Goldman Chief Executive Lloyd Blankfein. He died from a stroke a few months after leaving the bank in May 2012.