A recent WSJ story, “Panel Rules Investors Must Pay Goldman $500K in Legal Fees,” reports that two investors must pay $500,000 in legal fees to a Goldman Sachs unit after losing an arbitration case against the firm involving a options trading strategy, an arbitration panel has ruled.  Eric Snyder, a former real estate investment trust executive, and his wife Barbara, filed “clearly erroneous” claims against Goldman Sachs, according to a Financial Industry Regulatory Authority (FINRA) arbitration award.

The Snyders originally sought $10 million for allegedly recommending unsuitable investments, misrepresenting information and breaching the duty of fair dealing to them, among the misdeeds.  The FINRA panel not only rejected those claims, but ordered the Snyders to pay $500,000 to cover Goldman’s legal fees and costs.  A law in Tennessee, where the Snyders lived at the time of the dispute, authorized the panel to award legal fees to Goldman.

The outcome in the case is a rare instance in which an arbitration panel has ordered investors who lost the case to pay a brokerage firm’s legal fees, say lawyers.  “It’s a head turner,” said Andrew Stoltmann, a Chicago-based lawyer who represents investors in arbitration cases.