John A. Paulson Is Not Target of S.E.C. Inquiry - the new york times
compressed and paraphrased:
John Paulson, a hedge-fund manager (Paulson & Co.) found over 100 loan pools that were based around adjustable-rate loans borrowed by people with relatively low credit scores.
he then went to Deutsche Bank and Goldman Sachs to see how he could use this information to bet against the bubble. Paulson asked Goldman to put together a portfolio of these pools, or others like them, so that he could wager against them. he paid Goldman $15 million to create and market the deal.
Goldman let people invest in these securities, without telling them that they were picked by a man who was betting against them.
Paulson & Company made billions, everybody else lost.
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