By Suzanne Barlyn
March 21 The founder of a medical devices
company who racked up losses of $1.4 million in a Goldman Sachs
Group Inc private debt fund is considering whether to
appeal an arbitration ruling against him.
Richard Caruso, who launched Integra LifeSciences Holdings
Corp in 1989, filed an arbitration case against the Wall Street
firm in 2009, alleging misrepresentation, fraud and other causes
of action. The case was filed in the name of Caruso's family
investment vehicle, Athena Venture Partners LP.
Last week, Financial Industry Regulatory Authority (FINRA)
arbitrators rejected Caruso's claim in its entirety.
A Goldman Sachs spokeswoman said the firm "prevailed
entirely" in the arbitration. "The panel rejected every claim
asserted and found each of them to be 'clearly erroneous' and
'false,'" she said in a statement.
Caruso said Goldman first approached him about the fund in
2007. He said he decided to invest based on information he and
Athena's general partner received in a written summary and
discussions with Goldman advisers. But he alleged that the
strategy Goldman pitched, while risky, was different from the
one it used.
In their ruling, however, the arbitrators said the
misrepresentation claims were not supported by evidence.
Athena's $5 million investment in the distressed debt fund
lost roughly 50 percent of its value during the 2008 credit
crisis, according to Caruso's lawyer, David Moffitt of Saul
Ewing LLP in Wayne, Pennsylvania. Those losses declined to about
$1.4 million after Goldman shifted its strategy, Moffitt said.
Caruso is now president of The Provco Group, a Villanova,
Pennsylvania-based venture capital and business finance
consultancy. Caruso became a Goldman client about 13 years ago.