Tuesday, 25 November 2014
Last updated 44 min ago
May 20 2013 | 12:17pm ET
If Turnberry Capital Management wants its $13 million back from SunTrust Banks, it will have to seek it in the courts.
A federal judge in New York sided with SunTrust on Friday, blocking the hedge fund's arbitration claim against the bank. Turnberry, which went under in 2008, is seeking $13 million it lost on mortgage-backed securities issued by SunTrust the year before.
Turnberry wanted the case heard by a Financial Industry Regulatory Authority arbitration panel. But U.S. District Judge Naomi Reice Buchwald ruled that the hedge fund doesn't qualify as a SunTrust customer under FINRA rules.
Instead, it was Raymond James Financial, from which Turnberry bought the securities, that is the customer, as Turnberry "did not receive any other goods or services from SunTrust that would indicate a customer relationship." Turnberry had argued that the "economic reality" was the Raymond James was a mere conduit for selling the MBS.
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