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March 13, 2014

Ex-Goldman’s Tourre Ordered to Pay $825,000 in SEC Case

“Ex-Goldman Sachs Group Inc. vice president Fabrice Tourre, found liable for his part in a failed $1 billion investment, was ordered to pay more than $825,000 in the U.S. Securities and Exchange Commission case.

“U.S. District Judge Katherine Forrest in Manhattan ruled today that Tourre must pay $650,000 in civil penalties and give up $175,463 of his 2007 bonus, plus interest. He can’t seek reimbursement of the penalties from Goldman Sachs, the judge ruled.

“Tourre, 35, was found liable Aug. 1 after a jury trial at which the SEC claimed he intentionally misled investors in a subprime-mortgage vehicle called Abacus 2007-AC1. Tourre lied about the role played by billionaire John Paulson’s Paulson & Co. hedge fund, which helped choose the securities underlying Abacus then made a billion-dollar bet it would fail, the agency said.

***

“Dennis Kelleher, president of Better Markets, a Washington-based advocacy group, said today that the fine against Tourre doesn’t hide “the indefensible record of failure” by the SEC and Justice Department to charge any senior Wall Street executives with helping cause the crash.

“Systemic recklessness, fraud and criminality on Wall Street were at the core of the crash and crisis, which didn’t happen because of one junior employee at one bank,” Kelleher said in a statement.”

***

Read full Bloomberg article here.

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