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Goldman Loses Appeal of Bayou Creditors' Arbitration Win

Goldman Sachs Group Inc. lost its appeal of a $20.5 million arbitration award to creditors of Bayou Group LLC whose hedge funds -- for which Goldman served as broker -- turned out to be Ponzi schemes.

The U.S. Court of Appeals in Manhattan today affirmed a lower court’s decision not to vacate the 2010 award by the Financial Industry Regulatory Authority in favor of Bayou Group’s unsecured creditors.