NEW YORK (Bloomberg) — Paulson & Co., the hedge fund that made $15 billion betting on the decline in subprime mortgages in 2007, said its role in helping to design a mortgage-linked deal sold by Goldman Sachs Group Inc. was "appropriate and conducted in good faith", according to a letter sent to investors.

The Securities and Exchange Commission sued Goldman Sachs for fraud on April 16, saying it failed to disclose that Paulson & Co. helped choose securities for a so-called synthetic collateralised debt obligation and then wagered that it would collapse. Goldman Sachs told clients the securities included in the deal were selected by ACA Management LLC, an independent third party, according to the regulator. "We have always been forthright in expressing our opinions, and we never misrepresented our positions," John Paulson, the firm's founder, wrote in the letter dated April 20. "All our dealings were through arms-length transactions with experienced counterparties who had opposing views based on all available information at the time."

Paulson & Co. has not been accused of any wrongdoing and was not named in the suit. The SEC said that it didn't sue the firm because it was Goldman Sachs's job to disclose to investors how the CDO was constructed.

Even so, Paulson, 54, has been reaching out to clients to answer questions. On April 19 he spoke to a group of investors by telephone, according to two people who were on the call. He was also holding a conference call for all investors yesterday.