Goldman Sachs Group Inc. asked a New York judge to dismiss a $1 billion lawsuit by the Australian hedge fund Basis Capital, arguing that a U.S. Supreme Court decision in June bars the claim.
The lawsuit by Basis Capital's Basis Yield Alpha Fund focuses on Goldman's sale of the "Timberwolf" collateralized debt obligation. The complaint, filed June 9 in federal court in New York, alleges that the fund was pushed into insolvency after buying mortgage-linked securities created by Goldman.
Goldman argued that the suit is barred by the Supreme Court's June 24 ruling in Morrison v. National Australia Bank. In that case, the high court held that U.S. securities laws do not apply to the claims of foreign buyers of non-U.S. securities on foreign exchanges.