Hedge Fund Can't Force Arbitration In MBS Dispute

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.


In Depth

Q&A: High Conviction, Low Correlation

Oct 30 2014 | 7:35am ET

Acadian Asset Management's numbers are big: over $70 billion in assets under management...

Lifestyle

Ex-Hedgie Steyer Gives $56M To Climate Action Super PAC

Oct 28 2014 | 9:23am ET

Retired Farallon Capital founder Tom Steyer has poured almost $56 million into his...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

The yield curve and stock market response

Traders form habits quickly. Understanding these and their effects can better equip us to decipher actual market moves.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.