Australia law firm probes fund felled by Goldman CDO

SYDNEY, June 15 (BestGrowthStock) – Australian law firm Slater &
Gordon is looking at a possible class-action suit on behalf of
investors in the failed Basis Yield Alpha Fund, which made
heavy losses on a debt instrument marketed by Goldman Sachs
(GS.N: ).

Slater & Gordon (SGH.AX: ), which sayd its has won
settlements in class-action suits over asbestos-poisoning and
breast implants over the past 20 years, said on Tuesday that
about 100 investors had already contacted the firm about the
fund.

“The fund was being promoted as a product that was a
stable, low-risk and fixed-interest investment, but in reality
it was a high risk with exposure to products that were not
necessarily suitable for retail investors, retirees and
charities,” litigation lawyer Mark Walter said in a statement.

Up to 700 Australian investors are estimated to have
suffered a capital loss of more than A$300 million ($258
million) because of the fund’s collapse in 2007, the statement
said.

Separately, Basis Yield filed a law suit this month
accusing Goldman of misrepresenting the value of a
collateralised debt obligation (CDO) known as Timberwolf, which
garnered a lot of attention during a recent congressional
hearing.

Basis Yield sued Goldman to recoup $56 million it lost on
the CDO, said Eric Lewis, a Washington-based lawyer for the
fund. The suit also seeks $1 billion in punitive damages.
[ID:nN09150585].

Goldman Sachs has called the suit a misguided attempt by
Basis Yield to shift its investment losses to Goldman.

Slater & Gordon said it was investigating financial
advisors that recommended the Basis Yield fund to investors,
not Goldman Sachs.

Investment

(Reporting by Narayanan Somasundaram; Editing by Mark
Bendeich)
($1=1.163 Australian Dollar)

Australia law firm probes fund felled by Goldman CDO