(CNNMoney.com) -- During a hearing on Capitol Hill Friday, a former Moody's executive said he didn't know that hedge fund Paulson & Co. was involved in the selection of securities for a controversial Goldman Sachs portfolio.
"I did not know that and I'm fairly sure that my staff did not know either," said Eric Kolchinsky, a former managing director at Moody's who was involved in the rating of the portfolio at the center of the Goldman fraud case.
Kolchinsky testified before the Senate Homeland Security and Governmental Affairs Committee on Friday as part of its ongoing investigation of the role of credit rating agencies in the recent financial crisis. The hearing is the third in a series exploring the causes of the crisis.
The Committee's investigation coincides with fraud allegations against investment bank Goldman Sachs, which claim the firm misled investors by failing to disclose Paulson & Co.'s involvement in selecting mortgage securities for one of its portfolios, called ABACUS 2007-AC1, which Paulson & Co. was simultaneously betting against.
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