Tourre Wants 'Fabulous' E-Mails Tossed

Jul 10 2013 | 1:36pm ET

Fabrice Tourre, the former Goldman Sachs executive accused of misleading investors in a Paulson & Co.-linked collateralized debt obligation, gave himself the nickname, "the fabulous Fab," but he appears to have no pride in the authorship.

Tourre's lawyers have asked that a number of e-mails, including the "fabulous Fab" missive, be excluded from his upcoming civil trial. The Securities and Exchange Commission alleges that Tourre misled investors about Paulson's role in creating the CDO in question, ABACUS-AC1.

Paulson, which has not been accused of any wrongdoing, allegedly had a hand in picking the securities that went into the $1 billion CDO, which it made a killing shorting. Goldman settled the allegations against it for $1 billion.

In one e-mail, Tourre writes that he is "not feeling too guilty about this" and that it is "amazing how good I am in convincing myself." In the "fabulous Fab" e-mail, he wrote, in French, that "the whole building is about to collapse anytime now," and said he was "the only potential survivor."

Tourre's lawyer argued at a hearing yesterday that "these e-mails have nothing to do with the case we're about to try." Prosecutor Matthew Martens disagreed, telling the judge, "There is no other way to tell his state of mind."

U.S. District Judge Katharine Forrest handed a limited victory to Tourre yesterday, ruling that his lawyers will be permitted to question Laura Schwartz, who was Tourre's "primary contact" at ACA Financial Guaranty, which both insured and invested in the CDO. Schwartz was the target of an SEC probe into another CDO, but the regulator last month decided not to file charges. Tourre's lawyers will be allowed to question her on a limited basis about that decision.

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