Paulson & Co, the hedge fund linked to civil fraud charges against Goldman Sachs – accused of dishonestly playing both sides in selling securities – has moved to head off investor concerns about its role, Reuters said.

Goldman Sachs has been accused by the Securities and Exchange Commission of defrauding investors by failing to say that prominent hedge fund manager John Paulson bet against a Goldman subprime debt product that he helped design. The UK’s Financial Services Authority has also opened an investigation into the affair.

Paulson, in a conference call on Monday and followed up with a letter to investors late yesterday, says neither he nor anyone else at the firm had received a so-called Wells notice indicating that charges might be filed against the fund, several investors who listened to the call said, according to the news service.

No one had yet notified the $32 billion fund of their intentions to pull money out, they said.

"We are interested in buying out people who want to get out of Paulson, but so far no one has stepped forward," one of the investors, who asked not to be named because of the sensitivity of the matter, was quoted as saying.

Paulson declined to comment.

The affair throws a shadow over the investment business of Paulson & Co, which has been seen as one of the great winners of the recent financial turmoil, short-selling the sub-prime mortgage securities that fell sharply in 2007 and 2008. Paulson’s high profits highlighted how some investors, by luck and judgement, were still able to profit from the turmoil.

Goldman Sachs – as reported elsewhere by this publication – reported a sharp improvement in its earnings yesterday.