According to ProPublica (source) “Magnetar worked with major banks, including Merrill Lynch, Citigroup, and UBS. At least nine banks helped Magnetar hatch deals. Merrill Lynch, Citigroup and UBS all did multiple deals with Magnetar. JPMorgan Chase, often lauded for having avoided the worst of the CDO craze, actually ended up doing one of the riskiest deals with Magnetar, in May 2007, nearly a year after housing prices started to decline. According to marketing material and prospectuses, the banks didn’t disclose to CDO investors the role Magnetar played.” And “Magnetar pressed to include riskier assets in their CDOs that would make the investments more vulnerable to failure. The hedge fund acknowledges it bet against its own deals but says the majority of its short positions, as they are known on Wall Street, involved similar CDOs that it did not own.” What differs from the Goldman-Paulson situation is: “Magnetar says it never selected the assets that went into its CDOs.” Fine line between “pushing for what is riskier” and “selecting” but it might be the difference between basing selection on broad ratings/public information and private analysis of what assets were more likely to fail. Also, I should note that
And I just see that this is what Bloomberg thinks the case hinges on: article here.