The manager of an Australian hedge fund is suing US investment bank Goldman Sachs for more than US$1 billion over a bad product it claims made it bankrupt, a lawyer said yesterday.
Basis Capital’s Yield Alpha Fund went bust after losing US$56 million in two weeks on the “Timberwolf” collateral debt obligation (CDO), sold by Goldman Sachs dealers who knew it would fail, lawyer Eric Lewis said.
“They knew that they were shaky, they were assembled to be shaky to take some of the worst securities off of their books and put the risk on somebody else,” Lewis told Australian public radio from Washington.
“It was done at a time when Goldman’s own internal e-mails showed they had absolutely zero confidence in the CDO market and they knew it was going to fail, the only question was when,” he said.
The suit, filed on Wednesday in the US District Court’s southern New York district, is seeking to recover the US$56 million lost from US$80 million outlaid, and more than US$1 billion in punitive damages.
Lewis said Timberwolf was “immortalized” in internal e-mails, made public in congressional hearings, which called it “one shitty deal.” Timberwolf cleaned out Basis’s US$500 million Yield Alpha Fund, forcing it into bankruptcy.
Lewis said Goldman knew “the potential for disaster [was] there the moment the market turns south.”
Basis alleges Goldman not only sold the investments knowing that they were unlikely to perform, but that Goldman itself bet against the performance of those assets and began making margin calls on it within two-and-a-half weeks.
The case echoes a civil fraud suit filed against Goldman in April by the US Securities and Exchange Commission accusing the investment bank of “defrauding investors by misstating and omitting key facts” about a similar product based on subprime mortgage-backed securities.
Goldman dismissed the legal action as a “misguided attempt by Basis, a hedge fund that was one of the world’s most experienced CDO investors, to shift its investment losses to Goldman Sachs.
“Basis made its investment at market levels, levels that it deemed attractive,” a spokesman said.
EXPRESSING GRATITUDE: Without its Taiwanese partners which are ‘working around the clock,’ Nvidia could not meet AI demand, CEO Jensen Huang said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and US-based artificial intelligence (AI) chip designer Nvidia Corp have partnered with each other on silicon photonics development, Nvidia founder and CEO Jensen Huang (黃仁勳) said. Speaking with reporters after he met with TSMC chairman C.C. Wei (魏哲家) in Taipei on Friday, Huang said his company was working with the world’s largest contract chipmaker on silicon photonics, but admitted it was unlikely for the cooperation to yield results any time soon, and both sides would need several years to achieve concrete outcomes. To have a stake in the silicon photonics supply chain, TSMC and
IDENTITY: Compared with other platforms, TikTok’s algorithm pushes a ‘disproportionately high ratio’ of pro-China content, a study has found Young Taiwanese are increasingly consuming Chinese content on TikTok, which is changing their views on identity and making them less resistant toward China, researchers and politicians were cited as saying by foreign media. Asked to suggest the best survival strategy for a small country facing a powerful neighbor, students at National Chia-Yi Girls’ Senior High School said “Taiwan must do everything to avoid provoking China into attacking it,” the Financial Times wrote on Friday. Young Taiwanese between the ages of 20 and 24 in the past were the group who most strongly espoused a Taiwanese identity, but that is no longer
A magnitude 6.4 earthquake and several aftershocks battered southern Taiwan early this morning, causing houses and roads to collapse and leaving dozens injured and 50 people isolated in their village. A total of 26 people were reported injured and sent to hospitals due to the earthquake as of late this morning, according to the latest Ministry of Health and Welfare figures. In Sising Village (西興) of Chiayi County's Dapu Township (大埔), the location of the quake's epicenter, severe damage was seen and roads entering the village were blocked, isolating about 50 villagers. Another eight people who were originally trapped inside buildings in Tainan
SHARED VALUES: The US, Taiwan and other allies hope to maintain the cross-strait ‘status quo’ to foster regional prosperity and growth, the former US vice president said Former US vice president Mike Pence yesterday vowed to continue to support US-Taiwan relations, and to defend the security and interests of both countries and the free world. At a meeting with President William Lai (賴清德) at the Presidential Office in Taipei, Pence said that the US and Taiwan enjoy strong and continued friendship based on the shared values of freedom, the rule of law and respect for human rights. Such foundations exceed limitations imposed by geography and culture, said Pence, who is visiting Taiwan for the first time. The US and Taiwan have shared interests, and Americans are increasingly concerned about China’s
RSS