“A judge in New York has ordered Fabrice Tourre, a former Goldman Sachs (GS) executive, to pay $825,000 in civil penalties for his part in a mortgage deal that prosecutors say was designed to fail.
“Tourre was the only person named by the Securities and Exchange Commission when it accused Goldman in 2010 of defrauding investors in the 2007 sale of securities tied to subprime mortgages.
“The SEC claimed that Tourre and Goldman deliberately misled investors by selling them an investment product that was likely to fall in value. The underlying mortgages that made up the so-called Abacus security were selected in consultation with hedge fund Paulson & Co., which then bet against them, according to the SEC.
But punishing a “low level Goldman vice president” cannot make up for the SEC’s “indefensible record of failure” in prosecuting the senior bankers responsible for the financial crisis and ensuing recession, according to Better Markets, a nonprofit group that has been highly critical of Wall Street and its regulators.
“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,” said Better Markets president Dennis Kelleher. “History will judge prosecutors and regulators harshly for abdicating their duty to enforce the law without fear or favor on Wall Street as they do on Main Street.”
Read full CNN Money article here.