Fabrice Tourre, the only individual charged in the Goldman Sachs collateralized debt obligation fraud case, has argued that he can’t be sued in the U.S.
Tourre’s lawyers argue that the CDO deal, called ABACUS-2007-AC1, is not subject to U.S. securities laws because it was not a U.S. securities transaction and the buyer, the German bank IKB Deutsche Industriebank, is not a U.S. investor. Tourre himself, the vice president who oversaw the Abacus CDO, allegedly structured and marketed on behalf of hedge fund Paulson & Co., is based in London.
“The complaint’s failure to allege that any ABACUS-2007-AC1 transaction took place in the United States requires dismissal,” Tourre’s lawyers argued.
Tourre’s claim that the SEC suit is barred by a June U.S. Supreme Court decision mirrors that made by his employers in a separate CDO case. Goldman has sought the dismissal of a lawsuit filed by collapsed hedge fund Basis Capital Management, arguing that the transaction took place either in the U.K. or Australia, where Basis was based.
Goldman did not put forth that argument in the Abacus case, instead settling the charges for $550 million.