Basis Tries Again With New Goldman Lawsuit

Oct 28 2011 | 12:11pm ET

Collapsed Australian hedge fund Basis Capital Management is back—in court.

The firm said today that one of its funds has again sued Goldman Sachs over a pair of collateralized debt obligations, three months after a federal judge dismissed another Basis suit against the bank. Basis claims that Goldman misled it about the quality of the assets in the CDOs, Timberwolf and Point Pleasant. In its previous lawsuit, Basis cited a Goldman executive who called Timberwolf, "one shitty deal."

Basis' losses on the CDOs spelled its end.

"We remain committed to holding Goldman to account," Basis' Stuart Fowler said.

Basis' earlier lawsuit was dismissed due to a recent U.S. Supreme Court decision barring the use of U.S. securities laws by foreign buyers of non-U.S. securities. Goldman says the CDOs were sold in the U.K., while Basis claims it was a New York transaction; U.S. District Judge Barbara Jones in July said that Basis had not offered "sufficient facts that allow the court to draw the reasonable inference that the purchase or sale was made in the United States."

"We believe that we acted appropriately and refute in the strongest possible terms any suggestion that Basis Capital was misled in any way," Goldman said in a statement.

The new suit has been filed in New York state court.


In Depth

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Provio Brings Anonymous Interviewing to Wall Street

Aug 12 2015 | 2:44pm ET

Taking a page from social networking and dating websites, a startup technology company...

Guest Contributor

Agecroft Partners: Hedge Fund Industry Assets to increase $250B by Summer 2016

Aug 11 2015 | 11:29am ET

Assets will continue to flow into the hedge fund industry despite long-standing...

 

Editor's Note