A FINE TIME TO FORGET

Hedgie hazy at trial

For a financial whiz, Paolo Pellegrini sure has a fuzzy memory.

Pellegrini, who helped hedgefund manager John Paulson make billions off the housing market collapse, couldn’t remember what CDO, or collateralized debt obligation, stood for during his testimony yesterday in the trial of exGoldman Sachs banker Fabrice Tourre.

“I’m not sure,” Pellegrini said after a long, uncomfortable pause in the packed Manhattan federal courtroom.

“It may stand for collateralized debt obligation, but I’m not sure,” he said in response to a question from Matthew Martens, who is leading the Securities and Exchange Commission’s case against Tourre.

In the world of high finance, Pelligrini’s memory lapse — however arcane for the ninemember jury — is the equivalent of fictional slugger Roy Hobbs being unable to recall the name of his legendary bat, “Wonderboy.”

CDOs were Pellegrini’s breadandbutter during the financial crisis four years ago. As John Paulson’s former righthand man before he left to start his own fund, Pellegrini helped engineer a massive bet against subprime mortgages that allowed Paulson & Co. to pocket $3.5 billion.

The SEC claims Tourre and his former employer Goldman Sachs lied to investors about the role Paulson & Co. played in a complex mortgage security, called Abacus. Paulson handpicked the assets for Abacus, betting they would fail.

Pelligrini — wearing a dark gray, chalkstripe suit, white shirt and dark tie — responded to questions in a halting, methodical fashion, giving the SEC attorney fits.

“You are speaking in a very imprecise way so I’m having trouble answering your questions,” Pellegrini said to Martens at one point.

That exchange came after Martens asked Judge Katherine Forrest if he could treat Pellegrini as a hostile witness. She denied the request but said she might allow it later.

Day two of the highprofile trial saw Dwight Jaffe, a realestate expert witness, wrap up his testimony, which was laden with esoteric investment terms that the jury seemed to have trouble following.

Jury No. 4 appeared to fall asleep with terms like OWIC and BWIC tossed around during testimony from another Paulson & Co. official, Sihan Shu.

Shu testified in a thick accent that caused the courtroom stenographer to repeatedly interrupt his testimony in order to accurately record it.