By Karen Freifeld
NEW YORK (Reuters) - A New York appeals court dismissed a case against Goldman Sachs Group Inc brought by a bond insurer who claimed it was fraudulently induced to insure the bank's Abacus product tied to subprime mortgages.
In a 3-2 decision, New York's Appellate Division, First Department ruled that ACA Financial Guaranty Corp
ACA claimed Goldman Sachs misled it into believing Paulson & Co, a hedge fund, would take a long position in the Abacus CDO.
The appeals court said ACA could not claim it was relying on the misrepresentations, adding that the insurer could have asked Paulson & Co what position it intended to take.
(Editing by Jan Paschal)