Former Goldman Sachs banker found liable for deceiving clients

DPA New York | Updated on August 02, 2013 Published on August 02, 2013

A former Goldman Sachs official was on Thursday found liable for his role in a failed $1 billion investment in a civil case brought by the agency that oversees Wall Street.

The verdict against Fabrice Tourre, the former Goldman Sachs Group Inc vice president, was a victory for the US Securities and Exchange Commission and the US government in one of the most important legal judgements to come out of the 2007-2009 financial crisis.

The jury’s finding that Tourre was liable in six of seven claims could open the door to lawsuits by Goldman Sachs customers who lost money in connection with the investment.

Tourre faces monetary fines as well as a professional ban from the securities industry – decisions which US District Judge Katherine Forrest is expected to issue later.

Tourre, known by the nickname of “Fabulous Fab,” has become a symbolic figure for the greed and speculation of Wall Street.

He was involved in investments in subprime mortgage-backed securities. The industry-wide investments played a large role in the collapse of the housing market and ultimately in the global recession.

Tourre was found liable on claims of intending to defraud and negligence. In one of his emails to his girlfriend, he joked about fooling “widows and orphans” into buying the securities.

The losses from Tourre’s investments were global.

In 2010, the British operation of Goldman Sachs was fined 17.5 million pounds ($26.9 million) by the financial watchdog in London, the Financial Services Authority (FSA).

The fine was for failing to tell the FSA that its trader, Tourre, was under investigation in the US when he took up a job at the bank’s London office in 2008.

Published on August 02, 2013
This article is closed for comments.
Please Email the Editor