Basis Capital welcomes settlement
(19 July 2010 – Australia) Basis Capital has welcomed the news that Goldman Sachs has settled fraud charges in the US for US$500 million (A$627 million), as it pursues its own litigation against the investment bank.
The firm is currently suing the investment bank in the US District Court in New York in an effort to recoup the initial investment it made in 2007 when it purchased a series of high-risk securities.
Basis Capital is also seeking US$1 billion in damages from the investment bank.
The firm is claiming that Goldman Sachs and its local affiliate Goldman Sachs JBWERE were engaged in fraud when it sold Basis Yield Alpha Fund the Timberwolf securities and that the investment bank made ‘materially misleading statements and omissions’ in relation to the purchase of A$38.6 million worth of AA-rated securities and A$42 million worth of AAA-rated securities.
Swiss-based investment manager David Mapley, a one-time independent director of the collapsed Basis Yield Alpha Fund, told The Australian newspaper that a $US550 million fine for doing nothing wrong isn't a bad start.
Mr Mapley added that a precedent has been established . . . and from Basis's perspective, our case is far, far stronger. This bodes very well for Basis's case.
Basis Capital is also seeking US$1 billion in damages from the investment bank.
The firm is claiming that Goldman Sachs and its local affiliate Goldman Sachs JBWERE were engaged in fraud when it sold Basis Yield Alpha Fund the Timberwolf securities and that the investment bank made ‘materially misleading statements and omissions’ in relation to the purchase of A$38.6 million worth of AA-rated securities and A$42 million worth of AAA-rated securities.
Swiss-based investment manager David Mapley, a one-time independent director of the collapsed Basis Yield Alpha Fund, told The Australian newspaper that a $US550 million fine for doing nothing wrong isn't a bad start.
Mr Mapley added that a precedent has been established . . . and from Basis's perspective, our case is far, far stronger. This bodes very well for Basis's case.
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