NEW YORK (AP) — A former hedge fund executive has testified in a New York City case about how the fund made $1 billion off the housing market collapse.
Paolo Pellegrini took the witness stand Tuesday at the civil trial of Fabrice Tourre (fah-BREES' toor). The Securities and Exchange Commission has accused the former Goldman Sachs trader of scheming to give the hedge fund and Goldman client, Paulson & Co., an advantage over other investors.
Pellegrini testified that the hedge fund foresaw in 2006 that "there would be a lot of mortgage defaults" and decided to bet against mortgage-based investments.
In opening statements Monday, prosecutors accused Tourre of using "lies, trickery and deception" to help Paulson make a killing.
The SEC never charged anyone at Paulson.