Goldman Wins Dismissal Of Hedge Fund's CDO Lawsuit

Jul 22 2011 | 12:41pm ET

A U.S. judge has thrown out Australian hedge fund Basis Capital Management's lawsuit against Goldman Sachs, ruling that Basis didn't prove that the collateralized debt obligation transactions in question took place in the U.S.

Citing a U.S. Supreme Court decision last year barring the use of U.S. securities laws by foreign buyers of non-U.S. securities, U.S. District Judge Barbara Jones ruled that Basis failed "to provide sufficient facts that allow the court to draw the reasonable inference that the purchase or sale was made in the United States." Goldman claims that the CDOs were sold in the U.K.; Basis has called it a New York transaction.

Jones gave Basis 30 days to file a new complaint with evidence that the transaction took place in the U.S. The hedge fund's lawyer said it intends to do just that.

"We are confident the sale of Timberwolf took place in New York," Eric Lewis said.

Basis collapsed four years ago due to losses suffered on the Timberwolf CDO. The hedge fund was seeking more than $1 billion, accusing Goldman of misleading it about the quality of the assets in the CDO, and providing evidence that an executive at the bank had called the CDO, "one shitty deal."


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this race. The Citadel...

Guest Contributor

Top 5 Predicted Outcomes Of CalPERS' Hedge Fund Divestment

Sep 22 2014 | 8:35am ET

CalPERS’ announcement to divest of hedge funds has created a significant buzz...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.