Goldman Sachs Group Inc. must face fraud claims in a lawsuit filed by the Australian hedge fund Basis Capital Funds Management Ltd. over the sale of collateralized debt obligations, an appeals court ruled.

An appellate court in Manhattan upheld state Supreme Court Justice Shirley Werner Kornreich’s October 2012 denial of Goldman Sachs’s motion to dismiss the fraud claims, while modifying it to throw out claims of negligent misrepresentation, unjust enrichment and rescission.

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