Hedge Fund Sues Goldman For $1.6B Over CDO Sales

Law360, New York (June 9, 2010, 4:33 PM EDT) -- Australian hedge fund Basis Yield Alpha Fund launched a $1.6 billion lawsuit against Goldman Sachs Group Inc. on Wednesday, alleging the beleaguered investment giant misrepresented subprime mortgage-backed securities as a good investment while knowing the move would likely drive the hedge fund to insolvency.

In a complaint filed Wednesday in the U.S. District Court for the Southern District of New York, the fund says Goldman made materially misleading statements while selling it $78 million in securities from a collateralized debt obligation known as Timberwolf 2007-1....
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