Australia hedge fund sues Goldman over 'shaky' products

The manager of an Australian hedge fund is suing US investment bank Goldman Sachs for more than a billion US dollars over a product it claims made it bankrupt, a lawyer said Thursday.
Basis Capital's Yield Alpha Fund went bust after losing 56 million US dollars in two weeks on the "Timberwolf" collateral debt obligation (CDO), sold by Goldman Sachs dealers who knew it would fail, said lawyer Eric Lewis.
The case echoes a civil fraud suit filed against Goldman in April by the US Securities and Exchange Commission (SEC) accusing the bank of "defrauding investors" about a product based on subprime mortgage-backed securities.
“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.