The New York Court of Appeals in a 5-2 decision said the suit by ACA Financial Guaranty Corp (ACAFG.UL) should move forward because the insurer had raised issues about the role of billionaire John Paulson’s hedge fund in a collateralized debt obligation called Abacus. ACA Financial said Goldman had deceived it into believing hedge fund Paulson & Co was a long investor in Abacus when it knew Paulson was betting the underlying mortgages would fail. ACA says it lost approximately $900 million on the deal when the subprime mortgage market collapsed.