May 15 Goldman Sachs & Co must pay more than
$2.5 million to an investor who alleged the firm recommended an
unsuitable investment in a private equity fund, a securities
arbitration panel has ruled.
The investor, Tracy Landow, filed the case against Goldman
Sachs, a unit of Goldman Sachs Group Inc, and her broker
in 2011, according to a Financial Industry Regulatory Authority
arbitration panel ruling. Landow also alleged the firm made
unauthorized trades in her account, among other things.
A FINRA arbitration panel found Goldman, but not the broker,
liable and ordered the firm to pay Landow $1.6 million and
roughly $1 million in interest, and other fees, according to a
ruling. The facts surrounding the case are unclear. The FINRA
panel, as is customary, did not include reasons for its
A Goldman Sachs spokeswoman declined comment. The firm
initially asked for Landow's case to be dismissed, according to
the ruling. Arbitrators, however, granted Goldman's request to
erase, or expunge, any disclosures about the case from the
The case stems from Landow's investment in the Goldman Sachs
Special Opportunities Fund 2006. Landow requested that Goldman
rescind the $2.3 million investment and pay her expert fees,
according to the FINRA panel ruling dated May 9.
One of the three arbitrators who heard the case disagreed,
in part with the ruling because she believed the investment was
suitable, according to a written statement the arbitrator
provided in the award.
Dissents by arbitrators can sometimes give the losing party
fodder for trying to reverse rulings against them in court, say
lawyers. Arbitration rulings are typically binding. But courts
can overturn arbitration awards in rare instances, such as when
arbitrators exceed their authority.
A lawyer for Landow did not immediately return a call