Basis Battles Back Against Goldman Dismissal Bid

Aug 26 2010 | 12:51pm ET

Collapsed Australian hedge fund Basis Capital has said that if Goldman Sachs’ bid to dismiss its $1 billion lawsuit is successful, it would render U.S. securities laws useless.

Basis, which accuses Goldman of misleading investors in a collateralized debt obligation that one of its own executives described as a “shitty deal,” urged U.S. District Judge Barbara Jones to reject Goldman’s dismissal bid, calling it an “improper distraction.” Goldman has argued that a recent U.S. Supreme Court decision that forbids federal securities fraud lawsuits filed by foreign buyers of foreign securities traded abroad bars Basis’ suit.

“Goldman’s thesis, if adopted, would render the U.S. securities laws a nullity any time a U.S. seller engages in fraud in effecting the sale of a security to a foreign purchaser,” Basis said in its response to Goldman this week. In any case, the hedge fund wrote, the $78 million deal “was a New York sales transaction from start to finish.”


In Depth

The Benefits Of Private Debt Investing

May 7 2015 | 10:43am ET

Jeffrey Haas is chief operating officer of Old Hill Partners Inc., an SEC-registered...

Lifestyle

Yale Receives $150 Million Gift from Blackstone’s Schwarzman

May 12 2015 | 12:10am ET

Yale University announced it has received a $150 million gift from Blackstone Group...

Guest Contributor

How To Generate 6% Yield In A Volatile World

May 22 2015 | 6:41am ET

Private credit comes in many different flavors, all with the common themes of over...

 

Editor's Note