John Paulson Settles Ex-Puerto Rico Partner Ghaffar’s Fraud Suit

John Paulson’s former Puerto Rico business partner agreed to drop a fraud lawsuit against the billionaire as part of a confidential settlement.

Fahad Ghaffar and Paulson’s lawyers jointly asked for the case’s dismissal in a Friday court filing in San Juan federal court that provided no details of the settlement. Ghaffar claimed in a suit filed last year that Paulson made false claims to persuade him to invest $17 million in a luxury automobile dealership on the island.

John Paulson

Photographer: Rob Kim/Getty Images

The suit exposed a rift between Paulson and Ghaffar, who was at the hedge fund mogul’s side for many of ...