Mon, Dec 22, 2014
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. Investing - Big hedge funds win again on PetSmart, Riverbed, RBS sells real estate loans to hedge fund Cerberus, Talisman energy speculation: Which hedge funds could benefit?[more]

    Big hedge funds win again on PetSmart, Riverbed From CNBC.com: Another week, another set of wins for activist investors. On Sunday, pet supply retailer PetSmart agreed to the largest leveraged buyout of the year at $8.7 billion. Hedge fund firm JANA Partners had been pushing for a sale a

  2. Outlook - Hedge fund manager who remembers 1998 rout says prepare for pain, Bond guru Bill Gross predicts U.S. economic growth to dip to 2%[more]

    Hedge fund manager who remembers 1998 rout says prepare for pain From Bloomberg.com: Stephen Jen landed in Hong Kong in early January 1997 as Morgan Stanley’s newly minted exchange-rate strategist for Asia. He was soon working around the clock when investors began targeting the region’s

  3. Investing - Hedge funds get boost from healthcare in 2014, Paulson & Co takes stake in Salix on heels of inventory issues[more]

    Hedge funds get boost from healthcare in 2014 From Valuewalk.com: The healthcare sector started the year on a turbulent note, as stocks of many major biotechnology companies were battered. However, most of the players in this sector have bounced back. The BarclayHedge Healthcare & Biotec

  4. Opalesque Exclusive: U.S. legal receivables fund launched in August[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Investing in asset-backed receivables is a strategy that has been an integral part of the alternative investment space within the overall fixed income asset c

  5. Comment - High fees and low performance hit hedge funds[more]

    From FT.com: Disenchantment over high fees and lackluster performance may finally be turning the tide against hedge funds, fresh data suggest. Despite generally weak returns since the global financial crisis, hedge funds have enjoyed positive net inflows every year since 2010. This helped assets und