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Goldman sued over mortgage deal

Associated Press / January 7, 2011

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NEW YORK — Insurer ACA Financial Guaranty Corp. is suing Goldman Sachs over an investment that later went bad.

ACA is seeking $30 million in compensatory and $90 million in punitive damages. The lawsuit was filed yesterday in New York.

Goldman has already paid $550 million to the Securities and Exchange Commission in connection with the same investment, which was called Abacus.

The SEC sued Goldman last April, claiming that the bank created and sold a mortgage investment that was devised to fail.