John Paulson: I will cover cost of any Goldmans fallout

John Paulson, the head of hedge fund giant Paulson & Co, has said he would personally cover the cost of any litigation resulting from the Goldman Sachs scandal.

According to the Financial Times Paulson, whose hedge fund made huge profits by betting against a security created by Goldman Sachs, told investors in a conference call that if there were any legal costs as a result of the Securities and Exchange Commission's complaint (SEC), he would cover them.

However he also stressed he did not expect any legal action to be taken against the company in the call, which took place late last month.

'The SEC complaint has no impact on us,' said Paulson. 'The Securities and Exchange Commission is clear that we did not misrepresent anything.'

The SEC has accused Goldman Sachs of allowing Paulson & Co, the hedge fund run by John Paulson, to influence the choice of investments in a residential mortgage backed security (RMBS) the hedge fund was shorting.

Goldman Sachs told other investors the investments were selected by an 'independent, objective third party', according to the SEC.

Losses in the RMBS, called Abacus, amounted to $1 billion when the property bubble burst. Goldman Sachs has denied the wrongdoing.

Late last week Goldman Sachs shares fell sharply amid reports it was now under criminal investigation.