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Wednesday, April 28, 2010

Fabrice Tourre “categorically” denies misleading Goldman Sachs investors

Fabrice Tourre, the banker at Goldman Sachs at the centre of an investigation by the Securities and Exchange Commission (SEC), has denied allegations of misleading clients.
Fabrice Tourre “categorically” denies misleading Goldman Sachs investors
Fabrice Tourre

The financial regulator charged the investment bank and its employee with fraud by failing to provide enough data to clients on a collateralized debt obligation (CDO) security.

Hedge fund manager Paulson & Co took a short position against the CDO, a move which the bank is alleged to have failed to divulge.

Mr Tourre, a vice-president at the bank, said before the committee: “I deny - categorically - the SEC’s allegation. And I will defend myself in court against this false claim.”

He explained that he remembered informing ACA, one of the supposed duped investors, that Paulson was anticipating acquiring credit protection on parts of the transaction, which “necessarily meant that Paulson was expected to take some short exposure in the deal”.

“The last week has been challenging for me and my family, as I have been the target of unfounded attacks on my character and motives,” the banker added.

According to the SEC, Goldman Sachs received an estimated $15 billion for structuring the investment.

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