Monday, 25 May 2015
Last updated 2 days ago
Sep 13 2010 | 10:56am ET
The unsecured creditors of collapsed hedge fund Bayou Group have fired back at Goldman Sachs, which in June was ordered to pay them $20.6 million by an arbitration panel.
The creditors last week asked a federal judge to uphold the Financial Industry Regulatory Authority award. While the arbitrators did not explain their decision to side with the Bayou creditors, those creditors accused Goldman Sachs Execution and Clearing, which cleared trades for the collapsed hedge fund, of either gross negligence of willful ignorance in the face o what proved to be a $400 million Ponzi scheme. The award is the largest ever ordered by an arbitration panel against a securities firm.
In July, Goldman appealed, arguing that the arbitration panel had exceeded its authority and that the ruling paves the way for the creditors to be paid twice. The Securities Industry and Financial Markets Association agreed, filing a brief arguing that “the arbitrators disregarded the long-recognized principle that a clearing firm cannot be liable for merely processing transactions received from an authorized source.”
Nonsense, the creditors shoot back in their latest court filing, noting the arbitrators did not exceed their authority, since both Goldman and the creditors gave them the authority as part of the arbitration agreement. Nor is there any “double recovery” on the horizon, as “GSEC did not enter any proof that the almost $21 million in fraudulent conveyances at issue in this case were in fact transferred back to the hedge funds.”
The creditors also asked that the seal on the case sought and won by Goldman be removed.
“We believe the public has a right to know what happened,” Ross Intelisano, a lawyer for the creditors, said.
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…