New York (HedgeCo.Net) – Fabrice Tourre, the former Goldman Sachs hedge fund trader with the nickname “Fabulous Fab” has been found liable for fraud by a jury in Manhattan on six of seven counts of fraud.
The SEC in 2010 filed securities fraud charges against Goldman, Sachs & Co. and an employee, Fabrice Tourre, for making material misstatements and omissions in regards to a CDO that contributed to the financial crisis by magnifying losses associated with the downturn in the United States housing market. The failed mortgage deal cost investors approximately $1 billion.
“The SEC had accused Tourre of misleading institutional investors about subprime mortgage securities that he knew were doomed to fail, setting the stage for a valued Goldman hedge fund client, Paulson & Co., to secretly bet against the investment.” USA Today reports.
The SEC fined Goldman Sachs over $550 million, ordering a sweeping review of the companies business standards. SEC lawyers called Torre “The face of Wall Street greed.” He faces potential fines and a possible ban from the financial industry.
“We are gratified by the jury’s verdict,” said Andrew Ceresney, co-director of the regulator’s enforcement division, Bloomberg reports. “We will continue to vigorously seek to hold accountable, and bring to trial when necessary, those who commit fraud on Wall Street.”
Alex Akesson
Editor for HedgeCo.net
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