“In the largest investor arbitration award ever, 13 investors won $43 million from futures brokerage firm Refco Inc., a former broker at the firm, and one of its customers, financial adviser Jay Goldinger,” writes Peter McKay in today’s Wall Street Journal>

“California investor Robert Elliott will receive $15 million of the total — the largest award ever to an individual by the National Futures Association, the commodity industry’s self-regulatory organization.”

“Mr. Goldinger, of Beverly Hills, Calif., lost $100 million of his clients’ money in 1995 on an incorrect interest-rate bet. The award from Refco, a Chicago-based futures brokerage firm that executed Mr. Goldinger’s trades on exhanges, will compensate some of his customers for most of their losses from his bad trades and the commissions they paid him.”

“The decision caps one of the longest-running such cases, which spanned from the collapse of Mr. Goldinger’s flashy trading empire six years ago to the NFA’s decision June 30. The NFA held more than 100 hearings. The NFA’s arbitration director said she “lived and breathed” the case while it played out.”

“In the arbitration proceedings, Refco is alleged to have aided Mr. Goldinger in improperly allocating winning and losing trades to client accounts. In 1999, Refco agreed to a $7 million civil settlement with the Commodity Futures Trading Commission to settle federal allegations stemming from Mr. Goldinger’s activities.”

“Mr. Mitsopolous reached a similar deal for $1 million with the CFTC. Mr. Goldinger also paid a $6 million Securities and Exchange Commission fine last year. He also pleaded guilty last year to federal fraud charges and was sentenced to a year in a halfway house, his lawyer in those proceedings said.”