Articles Posted in Financial Firms

Below is a WSJ article about our firm’s $20.6 million FINRA arbitration award against Goldman Sachs related to the Bayou hedge fund fraud. It is the largest arbitration award ever rendered against Goldman. The award was confirmed by Judge Rakoff of the SDNY in November 2010 and Goldman filed it’s brief to the Second Circuit this week.

Goldman Continues to Fight $20.5 Million Award in Pivotal Case By LIZ MOYER

NEW YORK-Goldman Sachs Group Inc. is continuing to fight a $20.5 million arbitration award that, while relatively small from the big bank’s perspective, has broader implications for Wall Street.

Below is an On Wall Street piece about our firm’s representation of a Saudi investor in a $383 million FINRA arbitration against Citigroup Global Markets, Inc.

Citigroup Aims to Stop Arbitration From Proceeding By Lorie Konish, On Wall Street October 7, 2011

A new lawsuit filed by Citigroup Global Markets Inc. this week against a set of Saudi family investors with a $383 million claim against the firm will determine whether that case can proceed to arbitration.

Below is a story about CGMI’s attempt to stay a $383 million FINRA arbitration filed by our firm related to inappropriate behavior with respect to derivatives, hedge funds, and private equity transactions.

Oct. 6 (Bloomberg) — A Citigroup Inc. unit sued two Saudi investors seeking to block Financial Industry Regulatory Authority arbitration of their $383 million claim that the bank “wiped out” their family’s wealth.

Abdullah and Ghazi Abbar, a father and son from Jeddah who put family money into hedge funds, have no customer agreements or accounts with Citigroup Global Markets Inc., a New York-based broker dealer that they blame for mismanaging their family’s life savings, according to a complaint the Citigroup unit filed yesterday in federal court in Manhattan.

Sophisticated investors won a $54 million arbitration award against Citigroup Global Markets Inc. related to the MAT leveraged municipal arbitrage hedge fund. It is by far the largest FINRA award rendered against Citi related to MAT. The award in the matter named Hosier v. Citi also includes $17 million in punitive damages and $3 million in attorneys’ fees.

We have been retained by many MAT investors and have numerous pending arbitrations against Citi related to MAT and it’s sister fund Falcon. This award is a potential game changer.

It’ll be interesting to see if Citi attempts to move to vacate the award in court, especially due to the punitive damages amount. It is very difficult to vacate an arbitration award, however firms have been more aggressive in challenging arbitration awards in recent years. Either way, this is one of the largest arbitration awards ever rendered against a broker dealer at FINRA and a tremendous sign for MAT/Falcon investors with outstanding claims.

FINRA fined UBS Financial Services, Inc. $2.5 million, and required it to pay $8.25 million in restitution for omissions and misleading statements made regarding the “principal protection” feature of Lehman Brothers100% Principal-Protection Notes (PPNs).

Our firm is presently representing investors of the Lehman PPNs against UBS in arbitrations at FINRA. It’s good to see FINRA stepping up and fining UBS in this matter. It’ll be a battle in the many pending arbitrations against UBS for investors to enter the fine into evidence as an indication of wrongdoing by UBS.

According the FINRA press release, UBS had described the structured notes as principal-protected investments and failed to emphasize they were unsecured obligations of Lehman Brothers, which eventually filed for bankruptcy in September 2008.

A Florida FINRA panel awarded $6.4 million to an investor in Citi’s MAT municipal bond arbitrage fund this week. It’s the largest award rendered against Citi related to its MAT and Falcon proprietary fund blow-ups. The case is Berghorse v. Smith Barney (FINRA 08-04466). Although damages claimed on the award were $12 million, sources say the net out of pocket losses were under $10 million, making the award amount over 64% of the losses. The 29 hearing sessions also make it the longest MAT arbitration to date. This substantial award follows a string of 100% NOP awards rendered against Smith Barney late last year. Below is an On Wall Street piece about the case.

FINRA: Citi To Pay Investors $6.4M By Lorie Konish February 9, 2011

A Financial Industry Regulatory Authority panel has ordered two parts of Citigroup Inc. to pay $6.4 million to make up for investment losses tied to a group of troubled municipal arbitrage trust funds.

Below is a New York Times piece about the Firm’s $20.6 million arbitration award against Goldman Sachs being upheld by Judge Rakoff in a sternly written opinion.

DealBook – A Financial News Service of The New York Times November 30, 2010, 6:16 pm Goldman’s $20 Million Consequence By SUSANNE CRAIG

Goldman Sachs made its bed. Now Judge Jed S. Rakoff says the Wall Street firm has got to lie in it.

Below is a piece from the NY Times’ DealBook about Judge Rakoff confirming the $20.6 million arbitration award against Goldman Sachs, the largest arbitration award ever rendered against the firm.

DealBook – A Financial News Service of The New York Times November 8, 2010, 11:29 am Judge Upholds Award Against Goldman

A federal judge has denied a request by Goldman Sachs to throw out a record arbitration award levied against the Wall Street firm earlier this year.