A New York jury has discovered Former Goldman Sachs trader Fabrice Tourre responsible for fraud in a mortgage deal that cost $1 billion, after a two-week trial in a federal courtroom in Manhattan.
Ex-trader liable in SEC case
Jurors decided that the former trader, the self-proclaimed “Fabulous Fab,” had misled investors in the run up to the global financial crisis in 2008. Complex mortgage investments played a major role in the crisis.
Mr.Tourre was found liable in six of the seven fraud claims brought by financial regulators in the U.S. He was accused by the Securities and Exchange Commission (SEC) for misleading investors about investments related to subprime mortgages that he knew would not succeed.
Guilty of fraud
SEC lawyer Matthew Martens described Mr.Tourre’s testimony as “surreal, imaginary, unreal, dream-like.”
The case suggested an implicit deal between investment banks and regulator, in which the SEC didn’t charge senior executives of banks such as Goldman if the company itself was going to pay a huge settlement to help recover investor losses, Columbia Law School Professor John Coffee said.
Responding to the court’s judgment, Andrew Ceresney, co-director of the SEC’s enforcement division, said, they“will continue to vigorously seek to hold accountable, and bring to trial when necessary, those who commit fraud on Wall Street.”