Tuesday, 24 May 2016
Last updated 3 hours ago
Aug 5 2013 | 10:23am ET
The most famous and widely-discussed piece of evidence against former Goldman Sachs executive Fabrice Tourre played no role in the jury's decision to find him liable for securities fraud, according to members of that panel.
Much was made of an e-mail to Tourre's then-girlfriend in which he wrote that "the whole building is about to collapse" and that "the only potential survivor" was himself, "the fabulous Fab." But while the message earned much ink and many headlines, two jurors told The Wall Street Journal it played no role in their deliberations.
Evelyn Linares, a school principal from the Bronx, N.Y., said the jury didn't even discuss the e-mail. It "didn't make a difference in terms of what we were going to do," she said.
Instead, jurors told the Journal and The New York Times that they focused on "Wall Street greed" and the letter of the law in finding against Tourre and in favor of the Securities and Exchange Commission. Tourre was accused of misleading investors about the role played by and intentions of hedge fund Paulson & Co. in a collateralized debt obligation, ABACUS-2007-AC1. Goldman paid $550 million to settle its role in the case in 2010.
"He is what Wall Street is all about and it scared me," Linares told the Times. "Mr. Martens," the SEC lawyer, "told us at the beginning that we would see this was all about Wall Street greed, and we did get to see that."
The jury did say it was a shame that Tourre, a mid-level employee, was the only person who faced discipline over the CDO. Beverley Rhett, a former teacher, told the Times, "I could characterize him as somewhat of a scapegoat," and Beth Glover, an Episcopal priest, said, "It is a shame lower-level employees get pulled in. There's a part of me that felt it was very unfair."
"We don't think he deserved to take the blame for everything, but he did play along," Linares told the Times. She said that she was "disappointed" in Tourre, who all agreed did well on the stand. Linares said the turning point for her was the testimony of former Goldman saleswoman Gail Kreitman, who told the jury she didn't know that Paulson planned to short the CDO.
"She was not in the loop," Linares said. "It wasn't a minor detail. [Tourre] kind of kept it out, and it got him in the end."
"We were asked to look at his actions," Glover said. "They portrayed him as a cog, but in the end a machine is made up of cogs and he was a willing part of that."