Tuesday, 28 April 2015
Last updated 16 hours ago
Aug 1 2013 | 4:51pm ET
Former Goldman Sachs executive Fabrice Tourre has been found liable for misleading investors in a Paulson & Co.-linked collateralized debt obligation.
The jury took two days to find against Tourre on six of the seven claims brought by the Securities and Exchange Commission against him three years ago. According to the regulator, Tourre deliberately misled investors and the insurer of ABACAS-2007-AC1 about Paulson's role in selecting the securities that went into the deal, and about the hedge fund's plans to short it.
Paulson has not been accused of any wrongdoing in the case.
The verdict calls into question Tourre's defense team's decision not to call any witnesses in his defense, apparently convinced that the SEC had failed to make its case. Tourre himself testified—called by the SEC—and spent three days on the stand, telling the jury that he never intended to mislead anybody and that he was merely a mid-level employee following standard procedures.
Tourre's lawyers did not comment after the verdict was read this afternoon in Manhattan federal court. Beforehand, however, he told The Wall Street Journal that he was resigned to knowing that he'd always be a poster-boy for Wall Street's wrongdoing.
"I'm not naïve," he said. "It's going to stay with me forever."
"I know the point of view of many people in the world is that I'll probably look like a bad guy," he continued. "You cannot erase Google searches. You will forever get the same articles, forever get the fabulous Fab," he added, referring to the nickname he gave himself in an e-mail that took center stage at his trial.
"We're gratified by the jury's verdict finding Mr. Tourre liable for fraud," Andrew Ceresney, co-head of the SEC's Division of Enforcement said. "We will continue to vigorously seek to hold accountable, and bring to trial when necessary, those who commit fraud on Wall Street."
Goldman in 2010 paid $550 million to settle with the SEC, but Tourre, who has since left the bank and is now a graduate student, refused to make a deal.
"I was a big team player," Tourre told the Journal. "If there was something wrong with this transaction, wouldn’t people have told me?"
Tourre must now await U.S. District Judge Katherine Forrest's decision on what sanctions he'll pay. He could face fines of between $5,000 and $130,000 per violation.
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…