Magnetar told investors this week that it based its mortgage-CDO strategy on statistical models, not a fundamental belief that the housing market would slide.

WSJ: Paulson Confronts Goldman Fallout

It isn't clear whether ongoing scrutiny of Magnetar will rattle its investors, who have known some details of the firm's strategy for several years.

WSJ: Paulson Confronts Goldman Fallout

Wells Fargo sued both Magnetar and Calyon (the case is pending).

FORBES: The Next Big Dump

But Magnetar Capital, an Evanston, Illinois hedge fund that held equity in the deal, disputed that fact and insisted it should continue to get paid even if Orion had defaulted.

FORBES: Magazine Article

An article earlier this month in news outlet ProPublica was the latest to assert that Magnetar designed deals built to fail that caused cascading losses for investors on the other side of the trades.

WSJ: Paulson Confronts Goldman Fallout

Magnetar Capital LLC, another hedge-fund firm that, like Paulson, was heavily invested in collateralized debt obligations in 2007 also has been working to reassure investors that it believes its mortgage-linked investment strategy was sound and can withstand regulatory scrutiny.

WSJ: Paulson Confronts Goldman Fallout