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Wednesday, September 18, 2013 10:05:14 PM
Ex-Goldman trader Tourre goes on trial for fraud
Date July 16, 2013
Fabrice "Fabulous Fab" Tourre. Photo: AFP
The trial of former Goldman Sachs trader Fabrice Tourre, the Wall Street trader who became a face of the excesses of the financial crisis, opened on Monday in a US court.
Tourre, a 34-year old Frenchman known as "Fabulous Fab," is charged with fraud in connection with mortgage bonds that lost investors some $US1 billion when the market for "subprime" loans burst in 2008.
The Securities and Exchange Commission accuses him of selling the bonds - so-called synthetic collateralised debt obligations - to investors even though he knew they were likely to fail.
His former employer, Goldman, has already paid a record $US550 million to settle similar charges.
His trial kicked off on Monday morning under US District Judge Katherine Forrest and is expected to last two to three weeks.
Forrest told attorneys to keep the discussion as straightforward as possible, meaning they should avoid complicated financial terms like "swaps" or "synthetic derivatives" and should explain their meaning if they are employed.
Forrest also promised to not call Tourre "Fab the Fabulous," the nickname Tourre used for himself in emails about his work and the CDOs he was selling, and has since become widely used.
A graduate of France's Ecole Centrale and of America's Stanford University, Tourre kept a serious expression in court, clad in a black suit with a white shirt and orange tie.
His case is one of numerous highlighting the excesses of Wall Street that led to the crisis, which saw banks and other financial institutions founder and investors rack up huge losses on CDOs that plummeted in value once the US housing bubble imploded in 2007-2008.
At Goldman Sachs in early 2007, Tourre designed the complex "Abacus" CDO investment, which packaged higher-risk mortgage-backed securities.
He is accused of failing to warn investors that a hedge fund headed by John Paulson was involved in creating Abacus, and that Paulson was taking a huge bet against it even as it was being sold to investors expecting positive returns.
[ insert: Hedge Fund Billionaire John Paulson Lost $736M In Second Quarter Gold Bloodbath
http://www.forbes.com/sites/afontevecchia/2013/08/15/hedge-fund-billionaire-john-paulson-lost-736m-in-second-quarter-gold-bloodbath/
big deal, it's a drop in a bucket for the shonk billionaire ]
The buyers of the securities included Dutch giant ABN Amro and its sister bank IKB of Germany.
When the affair became public in April 2010, US media lambasted the apparent arrogance of Tourre, who refused to apologise during a hearing in Congress.
The case focuses in part on the $US2 million Tourre earned in 2007 and a series of private emails where Tourre compared the securities to "monstrosities" and little "Frankensteins" and made fun of the "poor, little subprime borrowers."
"Fabrice Tourre has done nothing wrong. He is confident that when all the evidence is considered, the jury will soundly reject the SEC's charges," his lawyers said in an email sent to AFP.
If found guilty, though, he faces fines and demands to reimburse the losses.
AFP
http://www.smh.com.au/business/world-business/exgoldman-trader-tourre-goes-on-trial-for-fraud-20130716-2q0rq.html
"In the end, of course, it wasn't just the executives of Lehman and AIGFP who got passes. Virtually every one of the major players on Wall Street was similarly embroiled in scandal, yet their executives skated off into the sunset, uncharged and unfined. Goldman Sachs paid $550 million last year when it was caught defrauding investors with crappy mortgages, but no executive has been fined or jailed — not even Fabrice "Fabulous Fab" Tourre, Goldman's outrageous Euro-douche who gleefully e-mailed a pal about the "surreal" transactions in the middle of a meeting with the firm's victims. In a similar case, a sales executive at the German powerhouse Deutsche Bank got off on charges of insider trading; its general counsel at the time of the questionable deals, Robert Khuzami, now serves as director of enforcement for the SEC."
.. that one of yours is a heavy read, insider corruption is mind-boggling ..
hopefully Tourre's orange tie will be swapped for and orange jumpsuit .. oh! .. update ..
The trial of Fabrice Tourre
Collective guilt
The verdict against a former trader exposes Goldman Sachs
Aug 10th 2013 | NEW YORK |From the print edition
WERE Fabrice Tourre merely an ordinary defendant in a case brought by the Securities and Exchange Commission (SEC), it would be time to forget his name. But on August 1st a jury in a Manhattan federal court found him liable on six counts of securities fraud—including one of “aiding and abetting” his former employer, Goldman Sachs. This means that a jury has found that the world’s most successful investment bank has done something wrong—and that the case may be far from over.
The trial’s judge, Katherine Forrest, must now decide what penalties to impose on Mr Tourre for his role in misleading investors about a complex security, called Abacus, which caused three financial firms to lose $1 billion. His attorneys will presumably argue that he has already suffered substantial loss, including his job (though Goldman has paid his legal fees) and public humiliation. The SEC could seek a ban from the industry and fines.
[ oh .. no chance of jail time?? ]
Given Goldman’s deep pockets, Mr Tourre had reason to take his chance in court. Conversely, there is little doubt that Goldman, which had already paid $550m to settle related claims with the SEC without admitting or denying guilt, would have preferred him to settle.
This time around, the firm may hope that Mr Tourre continues his defence. True, an end to proceedings would stop a public-relations nightmare: the trial painted a picture of a firm that was creative and responsive—but not fully forthcoming and certainly not to be trusted.
Yet allowing the aiding-and-abetting claim to stand may have legal ramifications. Goldman already faces a class-action suit by some of its shareholders, filed in the Southern District of New York, seeking billions in damages related to Abacus and three other transactions. The suit alleges that Goldman failed to disclose that it was acting against its own clients’ interests when creating these financial products.
“The Tourre verdict, in particular the finding that Tourre aided and abetted Goldman, sends a message to hold those responsible for creating these financial products that were destined to fail,” said Spencer Burkholz of Robbins Geller Rudman and Dowd, the counsel for the plaintiffs. Discovery is in process, a trial could come next summer. Much to his regret, Mr Tourre’s fame will continue.
http://www.economist.com/news/finance-and-economics/21583286-verdict-against-former-trader-exposes-goldman-sachs-collective-guilt
F6 .. i'm confused again .. is it that the class action against GS "could come next summer" .. that must be it .. Tourre has been found liable, it said the verdict is down on him .. then what's this about? .. "This time around, the firm may hope that Mr Tourre continues his defence." .. sheesh .. thought he had finished .. does he now defend against the penalty he could face? .. is that what it means? .. hate missing something that must be obvious to you guys .. anyway .. poached please .. lol .. yelp ..
Date July 16, 2013
Fabrice "Fabulous Fab" Tourre. Photo: AFP
The trial of former Goldman Sachs trader Fabrice Tourre, the Wall Street trader who became a face of the excesses of the financial crisis, opened on Monday in a US court.
Tourre, a 34-year old Frenchman known as "Fabulous Fab," is charged with fraud in connection with mortgage bonds that lost investors some $US1 billion when the market for "subprime" loans burst in 2008.
The Securities and Exchange Commission accuses him of selling the bonds - so-called synthetic collateralised debt obligations - to investors even though he knew they were likely to fail.
His former employer, Goldman, has already paid a record $US550 million to settle similar charges.
His trial kicked off on Monday morning under US District Judge Katherine Forrest and is expected to last two to three weeks.
Forrest told attorneys to keep the discussion as straightforward as possible, meaning they should avoid complicated financial terms like "swaps" or "synthetic derivatives" and should explain their meaning if they are employed.
Forrest also promised to not call Tourre "Fab the Fabulous," the nickname Tourre used for himself in emails about his work and the CDOs he was selling, and has since become widely used.
A graduate of France's Ecole Centrale and of America's Stanford University, Tourre kept a serious expression in court, clad in a black suit with a white shirt and orange tie.
His case is one of numerous highlighting the excesses of Wall Street that led to the crisis, which saw banks and other financial institutions founder and investors rack up huge losses on CDOs that plummeted in value once the US housing bubble imploded in 2007-2008.
At Goldman Sachs in early 2007, Tourre designed the complex "Abacus" CDO investment, which packaged higher-risk mortgage-backed securities.
He is accused of failing to warn investors that a hedge fund headed by John Paulson was involved in creating Abacus, and that Paulson was taking a huge bet against it even as it was being sold to investors expecting positive returns.
[ insert: Hedge Fund Billionaire John Paulson Lost $736M In Second Quarter Gold Bloodbath
http://www.forbes.com/sites/afontevecchia/2013/08/15/hedge-fund-billionaire-john-paulson-lost-736m-in-second-quarter-gold-bloodbath/
big deal, it's a drop in a bucket for the shonk billionaire ]
The buyers of the securities included Dutch giant ABN Amro and its sister bank IKB of Germany.
When the affair became public in April 2010, US media lambasted the apparent arrogance of Tourre, who refused to apologise during a hearing in Congress.
The case focuses in part on the $US2 million Tourre earned in 2007 and a series of private emails where Tourre compared the securities to "monstrosities" and little "Frankensteins" and made fun of the "poor, little subprime borrowers."
"Fabrice Tourre has done nothing wrong. He is confident that when all the evidence is considered, the jury will soundly reject the SEC's charges," his lawyers said in an email sent to AFP.
If found guilty, though, he faces fines and demands to reimburse the losses.
AFP
http://www.smh.com.au/business/world-business/exgoldman-trader-tourre-goes-on-trial-for-fraud-20130716-2q0rq.html
"In the end, of course, it wasn't just the executives of Lehman and AIGFP who got passes. Virtually every one of the major players on Wall Street was similarly embroiled in scandal, yet their executives skated off into the sunset, uncharged and unfined. Goldman Sachs paid $550 million last year when it was caught defrauding investors with crappy mortgages, but no executive has been fined or jailed — not even Fabrice "Fabulous Fab" Tourre, Goldman's outrageous Euro-douche who gleefully e-mailed a pal about the "surreal" transactions in the middle of a meeting with the firm's victims. In a similar case, a sales executive at the German powerhouse Deutsche Bank got off on charges of insider trading; its general counsel at the time of the questionable deals, Robert Khuzami, now serves as director of enforcement for the SEC."
.. that one of yours is a heavy read, insider corruption is mind-boggling ..
hopefully Tourre's orange tie will be swapped for and orange jumpsuit .. oh! .. update ..
The trial of Fabrice Tourre
Collective guilt
The verdict against a former trader exposes Goldman Sachs
Aug 10th 2013 | NEW YORK |From the print edition
WERE Fabrice Tourre merely an ordinary defendant in a case brought by the Securities and Exchange Commission (SEC), it would be time to forget his name. But on August 1st a jury in a Manhattan federal court found him liable on six counts of securities fraud—including one of “aiding and abetting” his former employer, Goldman Sachs. This means that a jury has found that the world’s most successful investment bank has done something wrong—and that the case may be far from over.
The trial’s judge, Katherine Forrest, must now decide what penalties to impose on Mr Tourre for his role in misleading investors about a complex security, called Abacus, which caused three financial firms to lose $1 billion. His attorneys will presumably argue that he has already suffered substantial loss, including his job (though Goldman has paid his legal fees) and public humiliation. The SEC could seek a ban from the industry and fines.
[ oh .. no chance of jail time?? ]
Given Goldman’s deep pockets, Mr Tourre had reason to take his chance in court. Conversely, there is little doubt that Goldman, which had already paid $550m to settle related claims with the SEC without admitting or denying guilt, would have preferred him to settle.
This time around, the firm may hope that Mr Tourre continues his defence. True, an end to proceedings would stop a public-relations nightmare: the trial painted a picture of a firm that was creative and responsive—but not fully forthcoming and certainly not to be trusted.
Yet allowing the aiding-and-abetting claim to stand may have legal ramifications. Goldman already faces a class-action suit by some of its shareholders, filed in the Southern District of New York, seeking billions in damages related to Abacus and three other transactions. The suit alleges that Goldman failed to disclose that it was acting against its own clients’ interests when creating these financial products.
“The Tourre verdict, in particular the finding that Tourre aided and abetted Goldman, sends a message to hold those responsible for creating these financial products that were destined to fail,” said Spencer Burkholz of Robbins Geller Rudman and Dowd, the counsel for the plaintiffs. Discovery is in process, a trial could come next summer. Much to his regret, Mr Tourre’s fame will continue.
http://www.economist.com/news/finance-and-economics/21583286-verdict-against-former-trader-exposes-goldman-sachs-collective-guilt
F6 .. i'm confused again .. is it that the class action against GS "could come next summer" .. that must be it .. Tourre has been found liable, it said the verdict is down on him .. then what's this about? .. "This time around, the firm may hope that Mr Tourre continues his defence." .. sheesh .. thought he had finished .. does he now defend against the penalty he could face? .. is that what it means? .. hate missing something that must be obvious to you guys .. anyway .. poached please .. lol .. yelp ..
It was Plato who said, “He, O men, is the wisest, who like Socrates, knows that his wisdom is in truth worth nothing”
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