- Former Goldman Sachs trader Fabrice Tourre was found liable for misleading investors in mortgage security, delivering a big win for the SEC.
- Critics have accused regulators of making fairly junior employees like Mr. Tourre scapegoats for Wall Street’s wider failings.
After two days of deliberations, jurors in downtown Manhattan found a Goldman Sachs (GS) banker liable in one of the highest-profile cases to arise from the financial crisis. They found former Goldman VP Fabrice Tourre liable on six of the seven claims of misleading investors in a $1 billion bubble-era mortgage security. It’s a huge victory for the Securities and Exchange Commission, which brought the case, and in a way it also marks a success for the presiding judge, Katherine Forrest, who fought hard to ensure the jurors would understand the complexities of the charges.
Fabrice Tourre
A former vice president on Goldman’s structured product trading desk in New York, he is accused by the SEC of misleading investors about a mortgage deal gone bad (a complex financial transaction known as a synthetic collateralized debt obligation, or CDO). He has referred to himself by a nickname given to him by a colleague, “the fabulous Fab.” He’s now pursuing a doctorate in economics at the University of Chicago.
In a surprise move, lawyers for Fabrice Tourre decided not to call any witnesses, as the Securities and Exchange Commission and defense rested their cases. Just one day later, on Aug. 1, 2013, he was found liable for six of seven charges.
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