Goldman told to pay creditors in Bayou scam

Goldman Sachs has been ordered to pay $20.58m to creditors of a failed hedge fund to settle claims that the bank helped the fund perpetrate a Ponzi scheme. The award represents the first time that a bank has been held accountable for a Ponzi scheme because of its role as a middleman. Goldman cleared trades and lent money to the Bayou Group, a Connecticut hedge fund that collapsed in 2005, when state and federal investigators said the firm defrauded investors of hundreds of millions of dollars.

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