Goldman Sachs' Bayou Fine: Firm Told To Pay $20.6 Million In Hedge Fund Ponzi Scheme

[Robert DAH Bruce]

Source: Huffington Post

NEW YORK — Goldman Sachs Group Inc. has been ordered to pay $20.6 million to scammed investors who say the investment bank should have known about the Ponzi scheme pulled off by the collapsed Bayou Hedge Funds. A three-person arbitration panel of the Financial Industry Regulatory Authority held the bank's Goldman Sachs Execution & Clearing unit, formerly known as Spear Leeds & Kellogg, liable in the dispute.

Stamford, Conn.-based Bayou collapsed in 2005, after the firm's then-CEO Samuel Israel III and Chief Financial Officer Daniel Marino admitted they lied about the company's profits and set up a fake accounting firm to falsify audits.

The $20.6 million award represents the money Bayou deposited into its accounts at Goldman, said attorney Ross Intelisano of Rich & Intelisano LLP, a New York firm that represents investors in securities cases. Goldman handled all of the hedge fund's trading between 1999 and 2004, when it stopped trading altogether, he said.

The fraud totaled about $250 million. The victims were mostly individuals who invested relatively modest amounts, about $300,000 to $500,000, Intelisano said. They were promised annual returns of 10 percent to 12 percent. Goldman maintained in its response in the case that the defrauded investors were "institutional and other highly sophisticated investors."


Read more: http://www.huffingtonpost.com/2010/06/26/goldman-sachs-bayou-fine-_n_626726.html

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Anti-business Commies! The seventeen minutes it'll take Goldman Sachs to dig that money out of their couches could have been spent helping save the country from Obama and his Marxist tyranny!!! :cry:

[Robert DAH Bruce]

1. Wow

The mods haven't locked or deleted this yet!

[grahamhgreen]

2. Obviously, they should be in jail, like Bernie Madoff