Trial to begin for ex-Wall Street trader likened to Big Bad Wolf
By The Associated Press
Published: Sunday, July 14, 2013, 6:15 p.m.
NEW YORK — A judge presiding over the civil trial of a former Goldman Sachs trader accused of misleading investors about the true prospects of their bet on a package of mortgage-based securities has summed up the charges against him with a fairy tale, saying it's as if he's accused of handing Little Red Riding Hood an invitation to grandmother's house while concealing the fact the invitation was written by the Big Bad Wolf.
In the case against Fabrice Tourre, U.S. District Judge Katherine B. Forrest says the victims weren't to be “hooded children but rather large financial institutions, operating in a dog-eat-dog world.”
His trial will open on Monday.
The charges stem from a group of mortgage-based securities that were marketed in early 2007 when Tourre worked for Goldman Sachs as a vice president. Tourre was born in France and moved to the United States in 2000 to study at Stanford University.
The Securities and Exchange Commission accused Tourre in an April 2010 lawsuit of making misstatements and omissions to investors in a portfolio of 90 subprime and midprime residential mortgage-backed securities.
In an effort to clear its name, Goldman Sachs released private emails that Tourre had sent to his girlfriend in 2007 using his office account. Amid the sweet talk were frank assessments of an industry that was about to collapse.
The mortgage “business is totally dead, and the poor little subprime borrowers will not last so long!!!,” Tourre wrote in March 2007.
“Managed to sell a few abacus bonds to widows and orphans that I ran into at the airport,” he said in June, describing one of Goldman Sachs's Collateralised Debt Obligations, tied to the performance of subprime mortgage-backed securities.
The charges accuse Tourre of making false and misleading statements and aiding false statements and material omissions by his employer. The SEC sought a declaration that Tourre had violated securities laws, along with a disgorgement of profits and unspecified penalties and damages.
In July 2010, Goldman Sachs settled charges brought against it, agreeing to pay $550 million. It still faces private litigation in the matter, including a federal securities class-action lawsuit.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- NRA seeks to block gun magazine ban
- White House advises teaching students about money
- Fannie, Freddie profits surprise
- Snowden captivates tech crowd
- General’s court-martial is thrown into jeopardy
- D.C. mayor denies he knew of illegal ‘shadow campaign’
- Changes to Medicare drug coverage scrapped
- Deaths from heroin, pain pills called ‘urgent,’ growing’ crisis
- Senate OKs bill scrapping ‘good soldier defense’
- Elephants attuned to human voices
- Depth, distance reduce impact of quake off California’s northern coast