Sun, Jun 24, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Hedge fund Basis Yield Alpha has 30 days to amend and refile suit against Goldman Sachs

Thursday, July 21, 2011
Opalesque Industry Update – On Thursday, the US District Court in New York issued a decision that determined the Basis Yield Alpha Fund transaction with Goldman (over subprime securities Timberwolf) was not a domestic transaction, however, Judge Barbara Jones ruled that BYAFM could amend their complaint to reflect this decision, and gave the BYAFM team 30 days to refile their complaint.

The Australian hedge fund is suing Goldman Sachs for fraud, in selling $81m of Timberwolf – which the investment bank itself termed internally a “sh*tty deal”.

Judge Jones ruled that the Supreme Court Ruling in Morrison v National Australia Bank, precluded Goldman Sachs from being pursued for a fraud claim in the US for securities purchased on foreign exchanges. Eric Lewis of law firm Baach Robinson & Lewis, lead counsel for BYAFM, said in a statement that, “We are pleased that Judge Jones rejected Goldman’s plea to dismiss the case with finality. We are confident the sale of Timberwolf took place in New York. The U.S. securities law do in fact apply to Goldman Sachs, even when it is selling securities to investors outside of the United States. This is one step on the way to BYAFM being able to bring Goldman to account for its fraudulent sale of the infamous Timberwolf security.”

Commenting about how this turn of events bodes for the financial community, securities lawyer and Forbes Contributor Bill Singer “says the Morrison decision was a major victory for every financial services and institution that engages in securities transactions in the U.S. “It raises the bar of truth for claimants but it also makes it harder for them to even get in the courthouse door”. (Source).

The Timberwolf securities declined more than $50m within a single month during the summer of 2007.

Kirsten Bischoff

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Paper: The performance of stocks actively pitched by hedge funds[more]

    Using a novel dataset drawn from investment conferences from 2008 to 2013, I show that hedge funds take advantage of the publicity of these conferences to strategically release their book information to drive market demand. Specifically, hedge funds sell pitched stocks after the conferences to ta

  2. North America - US fundraising for special purpose acquisition vehicles hits record this year[more]

    From AFR.com: Special purpose acquisition vehicles (spacs) are hitting the US market at the fastest rate on record, attracting the likes of Goldman Sachs and hedge fund investor Daniel Loeb for the two largest such deals in 2018. Spacs have raised $US4.5bn so far in 2018, the largest amount fo

  3. Investing - Man Group and AQR try to take aim at private equity industry, Hedge funds poised to be winners in AT&T-Time Warner deal[more]

    Man Group and AQR try to take aim at private equity industry From FT.com: The popularity of private equity investments has prompted asset managers such as Man Group and AQR to devise strategies that aim to replicate PE returns but at a much lower cost to investors. Both companies a

  4. News Briefs: David Stemerman's hedge fund holdings shrank before his run for governor, nvestment manager TSW triggers succession plan, Alan Howard joins Peter Thiel investing in Cologne-based fintech startup[more]

    David Stemerman's hedge fund holdings shrank before his run for governor But the U.S. holdings of Stemerman's Greenwich hedge fund, Conatus Capital, shrank from $2.6 billion at the apex to just over $1 billion before he announced his move into politics. (Hartford Courant) Inv

  5. British Empire: Pershing's 23% discount 'unsustainable'[more]

    From Citywire: The wide discount on Pershing Square Holdings (PSH) is 'unsustainable' and puts star hedge fund manager Bill Ackman under pressure, says British Empire (BTEM). Pershing is the third largest holding in the £850 million British Empire trust, managed by Joe Bauernfreund, which sp