According to reports, a document produced by the Financial Industry Regulatory Authority backed the creditorâs claims that Goldman neglected to investigate fraudulent trades related to the fund.
The Bayou Group is alleged to have ran a Ponzi scheme before its collapse in 2005, which is believed to have cost investors up to $400 million.
Ross Intelisano, a lawyer for the creditors committee of Bayou, told the Financial Times: âThere were certainly really significant red flags that would have put Goldman Sachs on notice that there was something wrong.â
âThe panel is not going to allow Goldman to stick its head in the sand when Sam Israel is running a Ponzi scheme.â
Samuel Israel, chief executive officer at the group at the time, is now serving a 20-year sentence after pleading guilty to misleading the fundâs investors.
Ed Canaday, Goldman Sachs spokesman, said: âWe are disappointed in the award and we are considering our options."
By Jim Ottewill