The U.S. Court of Appeals for the Second Circuit has affirmed a ruling by Southern District Judge Jed Rakoff (See Profile) upholding a $20.6 million arbitration award against Goldman Sachs for clearing trades for a fraud-riddled hedge fund.

The award was won by the unsecured creditors’ committee of the bankrupt Bayou Group of hedge funds in June 2010 following an arbitration before the Financial Industry Regulatory Authority.