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 caitlin.nish@dowjones.com