| NEW YORK, Sept 3
NEW YORK, Sept 3 A New York state judge on
Wednesday ruled against a former Goldman Sachs Group Inc
trader who wanted the court to toss an arbitration panel's
decision in his pay dispute against the firm.
New York State Supreme Court Justice Eileen Bransten, who
ruled from the bench in her Manhattan courtroom, confirmed a
March decision by a Financial Industry Regulatory Authority
(FINRA) arbitration panel to dismiss a case filed by the
ex-trader, Deeb Salem. She also denied a request
by Salem's lawyer to throw out the arbitration ruling.
Salem's New York-based lawyer, Jonathan Sack, said he plans
to appeal. A Goldman spokeswoman could not be immediately
reached for comment.
Deeb Salem, known for his role in shorting the U.S. housing
market in the run-up to the financial crisis, had alleged in
court papers that FINRA arbitrators improperly dismissed his
case at Goldman's request in March, before he fully presented
his evidence and witnesses.
Salem filed the court case in June after a recording
revealed that an arbitrator described his case as "bullshit,"
according to court documents.
Salem, who worked on Goldman's mortgage trading desk, had
been seeking more than $21 million in compensation as well as
legal costs and other penalties, according to the FINRA panel
ruling. Salem wanted higher bonuses for 2010 and 2011, and a
bonus and deferred compensation that he did not receive for
2012. He left the Wall Street bank that year to take a job at
GoldenTree Asset Management.
He gained some notoriety after the financial crisis because
a U.S. Senate panel included his own performance review for
2007. In the review, Salem detailed what he described as
Goldman's plan to put a "short squeeze" on the mortgage market.
Sack, Salem's lawyer, told Bransten during a hearing on
Wednesday that arbitrators did not give him the chance to call
witnesses whom he wanted to testify in the arbitration.
But Sack "failed to show evidence that the material excluded
was pertinent to this case," Bransten said.
The FINRA arbitration panel accepted Salem's testimony
during the arbitration and "thereafter found there was no reason
to go forward," Bransten said.
Bransten also ordered that filings in the case be redacted.
She told Sack that it wasn't proper for him to have included the
arbitration transcript in the public record. Goldman submitted a
motion in June to seal the filings.
FINRA, Wall Street's industry-funded watchdog, also runs the
arbitration forum where investors and licensed brokerage
employees must typically resolve their legal disputes against
Arbitration rulings are typically binding. However, courts
may overturn them in limited circumstances, such as when an
arbitrator is biased. Sack and Salem failed to meet the "heavy
burden" required to overturn an arbitration ruling, the judge
(Reporting by Suzanne Barlyn; Additional reporting by Laura
LaCapra; Editing by Andrea Ricci)