Friday, 24 March 2017
Last updated 19 hours ago
Jul 25 2013 | 10:34am ET
Fabrice Tourre, the former Goldman Sachs executive on trial for defrauding customers of a Paulson & Co.-linked collateralized debt obligation, took the witness stand yesterday and denied wrongdoing.
Tourre is accused of misleading investors in the CDO, ABACUS-2007-AC1, about Paulson's role in selecting the securities that went into the mortgage-backed vehicle, and about Paulson's own plans. The Securities and Exchange Commission alleges that Tourre implied that Paulson would invest in the CDO, when the hedge fund actually shorted it—and made a killing in the process.
"I wasn't trying to confuse anybody," Tourre told the jury, referring to an e-mail in which he said an equity investment in the CDO had been "pre-committed." But he also admitted that the statement "wasn't accurate at the time."
Tourre was called to the stand by the SEC and spent two hours on the stand, speaking rapidly, suggesting that the SEC's lawyer, Mathew Martens, was wrong or confused and at one point knocking over a carafe of water. He also said he couldn't remember details of what he told Laura Schwartz—a former executive of ACA Financial Guaranty, which invested in and insured the CDO—who testified against Tourre this week.
Tourre also said that Paulson always planned to short the CDO. The hedge fund has not been accused of any wrongdoing.
Tourre will return to the stand today.