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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firstdivision's picture

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

Duuude's picture

 

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

 

Down under...

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...

Greater Fool's picture

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

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.

knukles's picture

"asymmetric information"

Brilliant description.  Brilliant.
+ 1 Greasy Squid Bonus Pool

Spitzer's picture

This should end the same way as Drexel.

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

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.

The Rogue Trader's picture

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

Popo's picture

Woohoo!  Zero Hedge is back online.  

BrianOFlanagan's picture

hedge funds = dumb money

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.

carbonmutant's picture

 Who trusts their broker?

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.

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,

Byte Me's picture

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

sweet ebony diamond's picture

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

Byte Me's picture

Both.

 

(One tentacle washes another..)

bada boom's picture

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

 

robins's picture

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