Fabrice Tourre wanted to 'feed Wall St greed' says SEC lawyer
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Wednesday 31 July 2013
Fabrice Tourre fraudulently misled investors in a bid to “feed Wall Street greed,” giving them “half the truth” about a sub-prime mortgage investment that ultimately went bad when the credit crunch tore through the housing market, a lawyer for the US Securities and Exchange Commission claimed yesterday in a closing argument before a New York jury.
Mr Tourre, a former Goldman Sachs vice president, is being tried on allegations that while working at the investment bank he misled investors who backed a complex mortgage-based security by failing to inform them that a prominent hedge fund not only helped create the instrument in 2007 but also placed bets that its value would decline. When the housing market turned sour, the Paulson & Co, which is not accused of any wrongdoing, made a profit, while investors such as ABN Amro, now owned by Royal Bank of Scotland, were left nursing combined losses of around $1bn.
The SEC’s top lawyer, Matthew Martens, yesterday tried to convince a jury of nine men and women that Mr Tourre was guilty of committing fraud when he worked on the security known as Abacus. Goldman is not accused in the case, having settled with the SEC as part of a deal under which it paid $550m without admitting or denying any guilt.
Mr Martens told the jurors that Mr Tourre, who denies the charges, wanted them to “live in a fantasy world.” “Only if you close your eyes to the facts [can you] find Mr. Tourre not liable for his actions,” he said.
Later, Mr Tourre’s counsel, John Coffey, told jurors that the former banker, who faces the possibility of a fine and a potential ban from working in the securities industry if he loses the case, was just an individual fighting to prove his innocence. “He refuses to yield to a powerful government agency,” he said.
The closing arguments came after lawyers for Mr Tourre decided against calling any witnesses on Monday, speeding up the trial in what was a surprise move.
Over the past fortnight, the two sides have been questioning witnesses, including Mr Tourre, in what is one of the few cases stemming from the financial crisis where an individual has been put on trial.
The SEC, facing widespread criticism of its failure to prosecute individuals after the crisis, is hoping for a rare victory in the civil case against the 34 year old French national. Already, Mr Tourre has become something of poster-child for Wall Street excess, after emails from 2007 emerged in which he boasted to his then girlfriend that “the whole building is about to collapse anytime now... the only potential survivor, the fabulous Fab.” During the trial, he portrayed the message as nothing more than a “silly, romantic” note, which he regrets.
- 1 The political parties aren't all the same – which means 2015 will be a 'big-choice' election
- 2 President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
- 3 ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
- 4 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 5 Naomi Wolf reacts to Isis 'conspiracy theories' critism after she questions whether beheading videos are real
President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
UK weather: Warning for more snow and ice as freezing temperatures and gales hit Britain
Three killed at South Korean nuclear reactor days after hackers target country's atomic agency
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Immigrants make UK racist, says Ukip councillor Trevor Shonk
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Nigel Farage: Ukip leader named 'Briton of the year' by The Times
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...