'Fabulous' E-Mail Sticks In Paulson CDO Case

Jul 12 2013 | 3:07am ET

Much to his chagrin, the jury that will decide former Goldman Sachs executive Fabrice Tourre's fate will learn just how fabulous he thought he was.

U.S. District Judge Katherine Forrest on Wednesday issued a preliminary decision that would allow prosecutors to use several colorful e-mails by Tourre at his upcoming civil trial. Tourre is accused of misleading investors about the role played by Paulson & Co. in a collateralized debt obligation structured by Goldman in 2007.

In one of the e-mails, Tourre gives himself a nickname that he now surely regrets, writing, "the whole building is about to collapse anytime now" and the "fabulous Fab" was "the only potential survivor." In another e-mail, Tourre wrote that he was "not feeling too guilty about this" and that it is "amazing how good I am at convincing myself."

The Securities and Exchange Commission, which brought the lawsuit against Tourre, alleges that 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 has already settled with the SEC, agreeing to pay $550 million.

Prosecutors had argued that the candid e-mails were the only way to show Tourre's "state of mind," while Tourre's lawyers argued they were irrelevant. The trial is set to begin on Monday.

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