"Do you want to see the Famous Abacus prospectus, here it is in full. Édifiant as we say in French. Who bought this marketing hoax??"

Eoin Treacy's view Thank you for this illustrative link. In a bull market investors tend to spend less time looking at the prospectus and more at the potential return. This appears to have been no less true of CDOs than any other bull market in the past and we can expect the same to be true of future manias.

From what I've read of this prospectus, it is similar to other subprime-backed CDOs. Let's not forget Goldman Sachs was far from the only bank issuing this type of debt. If the remit of the current investigation is extended it could check investor interest in the sector for a while.
One issue that has so far escaped the notice of litigators is the extent to which ratings agencies were complicit in these vehicles. In this structure Class A, B, C and D all carried A and better ratings on portfolios of prime and just above subprime loans. Even a cursory look at the reference entities should have alerted investors to the intrinsic problems with this model regardless of CDS insurance purportedly backing up these ratings.