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From Kirsten Bischoff, Opalesque New York:

The day after the United States Senate released what has been described as a "scathing report" on the activities of Goldman Sachs leading up to and during the financial crisis, Australian-based Basis Yield Alpha Fund (which has waged a legal battle with the investment bank over its Timberwolf CDO), released a comment saying "Yesterday’s Senate Report confirms that in fact Goldman made a concerted effort to mislead and defraud investors, including Basis."

The Basis Fund suit was filed in June 2010 after the fund saw an $80m investment into Timberwolf disintegrated in a matter of weeks (the suit alleges the fund lost $50m in losses and margin calls). The fund is arguing that Goldman used aggressive sales tactics and assurances that the secondary CDO market was stable, knowing that these statements were false. In August 2010, Goldman submitted a motion asking that the case be thrown out entirely due to jurisdiction because The Basis Fund executives are based in Australia. That motion was denied and the case is still working itself through the US Federal Court System.

In Thursday’s statement the Basis Fund legal team says that having asked Goldman executives questions regarding the Timberwolf security "they were met with carefully constructed lies and non-disclosures." Eric Lewis, lead counsel for the fund says "Goldman created Timberwolf to fail, so Goldman could bet against it, and Goldman then sold the security to Bas......................

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