“Jonathan Egol and Fabrice Tourre were close colleagues on Wall Street, a team of traders who worked side by side on a Goldman Sachs mortgage desk in the lead-up to the financial crisis.

“On Thursday, that relationship came under the spotlight as Mr. Egol took the witness stand in the civil trial of Mr. Tourre, a 34-year-old Frenchman accused of misleading investors about a mortgage security that ultimately failed.

“The case, one of the most prominent actions stemming from the 2008 crisis, centers on the claim that Mr. Tourre and Goldman failed to warn investors that a hedge fund run by the billionaire John A. Paulson helped construct the mortgage security and then bet against it. Mr. Tourre’s lawyers argue that the investors were sophisticated and helped structure the deal.

“The Securities and Exchange Commission, which brought the charges in 2010, used Mr. Egol’s appearance as an opportunity to introduce a series of e-mails and documents that could damage Mr. Tourre’s defense. The e-mails, many of which were dispatches between the traders, show that Mr. Tourre told colleagues at Goldman that the mortgage security was “selected by ACA/Paulson,” referring to Mr. Paulson’s hedge fund and ACA Management, the independent company Goldman hired to choose the mortgages in the deal.”

***

Read full New York Times article here