First it was the ABACUS collateralized debt obligations, then the Timberwolf deals, and now it appears as though the Goldman Sachs Hudson Mezzanine CDO (CDO news) is the latest to cause regulatory woes. The Financial Times reports that the SEC (SEC  news) is taking a close look at the deal. This follows closely the news that Australian hedge fund Basis Capital has sued the firm for $1 billion, claiming it was forced into bankruptcy after buying some Goldman Sachs-peddled CDOs.

So what is going on? You would have to think that aggrieved investors are sensing an opportunity. They are likely scouring their deals and various agreements and exploring legal options. All would like to lower their losses. Some are likely quite angry. It's fair to say that SEC regulators are fielding lots of calls from Goldman Sachs customers. Investors in CDOs offered by other banks are likely just as miffed. So there are a lot of people reaching out to the SEC. I still expect something like a global settlement eventually.

For more on the Hudson deal:
- here's a  Bloomberg/Business Week article

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