The investment bank Goldman Sachs is reportedly trying to stop Australian legal action against it being heard in the United States.

The Australian fund manager Basis Capital is suing Goldman for about $1 billion in damages and losses for selling it an investment which it says caused the failure of one of its hedge funds.

Basis Capital's US-based lawyer, Eric Lewis, says Goldman appears to be arguing that because Basis is Australian and the litigation is a foreign securities claim, the legal action should not be brought under US federal securities laws.

"We think that's entirely wrong, because they were dealing with New York, the securities were issued by New York and, to the extent JB Were or any other Goldman entity was out there selling these securities, they were doing it as an agent of Goldman Sachs New York," he told ABC News.

Mr Lewis has also called for the Australian corporate regulator to investigate the investment bank over the way it marketed its products in Australia.

The US market regulator, the Securities and Exchange Commission, recently fined Goldman Sachs $US550 million dollars for misleading investors over the quality of another investment product .

Eric Lewis says the Australian Securities and Investments Commission should look into Goldman's behaviour.

"Particularly if Goldman is going to say well, if we sell a security to an Australian that doesn't concern the United States," he said.

"I think there is an important role for the Australians, if Goldman wants to do business in Australia they're going to have to meet those requirements."

A spokeswoman for Goldman Sachs JBWere has declined to comment.