Panel Rules Investors Must Pay Goldman $500K In Legal Fees

  By Caitlin Nish 
 

NEW YORK--An arbitration panel has not only tossed out two investors' multi-million dollar claim against Goldman Sachs Group Inc. (GS), it ordered the couple to pay the firm $500,000 in legal fees.

Barbara and Eric Snyder alleged Goldman made unsuitable recommendations, among other claims, by failing to disclose the extent of risk involved in trading options in CBL & Associates Properties Inc. (CBL) and investing on margin in the GS Vintage Fund V, according to documents from the Financial Industry Regulatory Authority arbitration panel. In their claim, filed in 2009, the Snyders asked for at least $10 million in compensatory damages.

Instead, the arbitration panel dismissed their allegations as clearly erroneous and ordered the Snyders, who were then residents of Chattanooga, Tenn., to pay Goldman $500,000 in attorneys' fees and costs.

A spokeswoman for Goldman Sachs declined to comment while an attorney for the Snyders couldn't immediately be reached.

The panel also recommended that the Snyders' claims be expunged from two Goldman brokers' records. Mr. Snyder was "an experienced stock trader who was aware of the risk of holding a concentrated position of CBL stock and is responsible for his own actions," the panel said in its decision, which was dated May 30.

It added that the Snyders didn't follow their brokers' recommendation to sell the CBL stock. The investors' loss was caused by their own actions and the stock market collapse in the fall of 2008, the panel ruled.

-Write to Caitlin Nish at [e-mail]