In the wake of SEC/Goldman, the must-read Appendix

"It seems to me that it shouldn’t matter whether Paulson & Co. took down the equity tranche of the Abacus deal. The securities fraud occurred when the CDO investors (ACA and IKB) were misled into believing that their interests were aligned with Paulson’s. But even if Paulson HAD taken down the $90 million equity tranche in order to get the deal done, his interests would still have conflicted with investors’ by virtue of the billion-dollar CDS insurance policy he took out on the deal."