Fri, Aug 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. Institutions – Texas Employees sets 2015 tactical plan for alternatives, CalPERS' real estate consultant cautions the pension fund's investment committee, Why Sunsuper likes hedge funds[more]

    Texas Employees sets 2015 tactical plan for alternatives From PIOnline.com: Texas Employees Retirement System will invest in up to four new hedge funds in the next fiscal year, which begins Sept. 1. Trustees approved 2015 tactical investment plans for the hedge fund, private equity and in

  2. Private equity follows hedge funds into reinsurance for long-term capital[more]

    From Artemis.bm: It’s not just hedge funds that are entering the insurance and reinsurance market in search of so-called long-term capital to put to work in their strategies, private equity firms targeting the space are also seeking opportunities to add assets under management. The entry of large pr

  3. North America – New York City’s next hot neighborhoods targeted with property funds[more]

    From Bloomberg.com: New York’s real estate world is filled with tales of ordinary people who bought property decades ago and saw values skyrocket to the millions. Seth Weissman is seeking investors to get in early on the next hot neighborhoods. The veteran of Goldman Sachs Group Inc. and hedge

  4. Investing – George Soros bets $2bn on stock market collapse, Warren Buffett's Berkshire reveals Charter stake, cuts DirecTV, Hedge funds lusting to cash out of MGM, Top hedge fund managers are buying Ally Financial, Hedge funds dumped 5m Herbalife shares in Q2, Paulson & Co hedge fund ups Puerto Rico real estate bet, Netflix Inc., Citigroup Inc, Google Inc are top new picks in Tiger Management’s 13F[more]

    George Soros bets $2bn on stock market collapse From Newsmax.com: Billionaire investor George Soros has increased his financial bet that U.S. stocks will collapse to more than $2 billion. The legendary hedge fund manager has been raising his negative bet on the Standard & Poor's 500 Inde

  5. Investors now net short S&P500 and increased Russell shorts, technicals suggest further selling[more]

    Komfie Manalo, Opalesque Asia: Market Neutral funds increased their market exposure to -1% net short from -6% net short last week, according to Bank of America Merrill Lynch’s Hedge Fund Monitor. The report also added