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Australia's Basis Yield Alpha Fund Says It Is Suing Goldman Sachs Over Timberwolf CDO Deal

Tyler Durden's picture




 

From the lawsuit: "Goldman intentionally failed to provide correct information regarding the state of the market in Timberwolf and/or intentionally failed to provide correct information concerning Goldman's actual opinion concerning the state of the market for the Timberwolf security and its quality and value. At the time Goldman made these statements to BYAFM, Goldman was actively shorting both Timberwolf and comparable securities because Goldman's internal assessment of the market for such securities was that their value would drop. In order to reduce Goldman's exposure to CDOs, Goldman personnel made false and misleading statements of material fact, knowing such statements were false and misleading... and with knowledge that BYAFM would rely on them in making the decision to purchase an interest in Timberwolf. Moreover, Goldman personnel failed to disclose material information knowing that, by this omission, information that they did disclose was rendered misleading, or they acted with reckless disregard as to whether the omission of the information rendered other disclosures misleading."

Full lawsuit: 

 

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Wed, 06/09/2010 - 12:11 | 403417 firstdivision
firstdivision's picture

Should this get filed, GS may have a tidal wave of suits coming their way. 

Wed, 06/09/2010 - 12:22 | 403452 Duuude
Duuude's picture

 

Trying ta figger if'n tha Squid will get hit with damages...

 

Down under...

Wed, 06/09/2010 - 12:16 | 403431 williambanzai7
Wed, 06/09/2010 - 14:57 | 403877 DudleyDoRight
DudleyDoRight's picture

Put on my dancin shoes...

Headed straight for the rhythm and blues...

The collateral was shot, but my counterparty was not...

Got my finger in the socket...

No way for the giant squid to stop it...

Wed, 06/09/2010 - 12:21 | 403449 Greater Fool
Greater Fool's picture

This would be the famous "shitty deal." GS deserves a good civil reaming over this one.

Wed, 06/09/2010 - 12:40 | 403512 pan-the-ist
pan-the-ist's picture

Queue the Goldman apologists who think Basis Yield Alpha should have done their homework. 

It is perfectly ethical in the mind of some people to sell a (known) lemon presented as peach.

GS shouldn't be surprised that nobody wants to continue playing their game of asymmetric information.

Wed, 06/09/2010 - 13:05 | 403583 knukles
knukles's picture

"asymmetric information"

Brilliant description.  Brilliant.
+ 1 Greasy Squid Bonus Pool

Wed, 06/09/2010 - 12:25 | 403465 Spitzer
Spitzer's picture

This should end the same way as Drexel.

Wed, 06/09/2010 - 12:30 | 403471 cowdiddly
cowdiddly's picture

Duh, Never invest in a package called Timberwolf especially if one of your main export is sheep. Whose bones did you think the wolf was going to chew on

Just like my Grandpa told me "Never invest in anything that eats or needs painting"

.......or anything with tentacles

Wed, 06/09/2010 - 12:29 | 403480 jd2iv987
jd2iv987's picture

they will settle...nothing will happen.

 

we are talking about 100 million dollars. doesnt goldman make that on 90 percent trading days.

 

cmon...move along...nothing to see here.

Wed, 06/09/2010 - 12:30 | 403484 The Rogue Trader
The Rogue Trader's picture

Before long...the big bonus babies will be GS's lawyers...

Wed, 06/09/2010 - 12:31 | 403487 Popo
Popo's picture

Woohoo!  Zero Hedge is back online.  

Wed, 06/09/2010 - 12:37 | 403506 BrianOFlanagan
BrianOFlanagan's picture

hedge funds = dumb money

Wed, 06/09/2010 - 12:49 | 403545 dirtiersanchez
dirtiersanchez's picture

HAHAHA. Spare me. These guys....4 years later...are taking a crack at a settlement.  They made a bad macro call back then and figured why not take a crack a GS after watching the hearings. They had no clue what they were investing in back then ...and have less a clue what they are doing now. Why not pile on and see what you can get says the representing attorney.

Wed, 06/09/2010 - 12:51 | 403549 carbonmutant
carbonmutant's picture

 Who trusts their broker?

Wed, 06/09/2010 - 12:52 | 403553 dirtiersanchez
dirtiersanchez's picture

HAHAHA. Spare me. These guys....4 years later...are taking a crack at a settlement.  They made a bad macro call back then and figured why not take a crack a GS after watching the hearings. They had no clue what they were investing in back then ...and have less a clue what they are doing now. Why not pile on and see what you can get says the representing attorney.

Wed, 06/09/2010 - 13:02 | 403579 Phil
Phil's picture

Can't wait for the "sophisticated investor" defense.

And here LB (He's gotta loveTony H ) thought BP disaster was going to drop GS from the headlines,

Wed, 06/09/2010 - 13:04 | 403580 Byte Me
Byte Me's picture

The mental pic of a timberwolf loose in the GS boardroom is highly satisfying.

Wed, 06/09/2010 - 13:07 | 403586 bingaling
bingaling's picture

+100

Wed, 06/09/2010 - 13:08 | 403592 sweet ebony diamond
sweet ebony diamond's picture

was Goldman Sachs a financial adviser (with a fiduciary duty) or a boiler room (selling poisoned apples)?

Wed, 06/09/2010 - 13:33 | 403665 Byte Me
Byte Me's picture

Both.

 

(One tentacle washes another..)

Wed, 06/09/2010 - 13:22 | 403631 bada boom
bada boom's picture

Ya gotta love the gs qoute of "one shitty deal" in the title.

 

Wed, 06/09/2010 - 20:21 | 404851 ZeroPower
ZeroPower's picture

WORD

Tue, 03/01/2011 - 02:44 | 1006271 robins
robins's picture

The blog was absolutely fantastic. Lot of great information which can be helpful in some or the other way. Keep updating the blog,looking forward for more contents. Great job, keep it up.

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