Former Goldman banker Fabrice Tourre 'The Fabulous Fab' has been found liable of 6 of 7 counts of securities fraud surrounding the bank's notorious $1 billion Abacus subprime mortgage CDO deal, Bloomberg reports.
Goldman, for its part, has already settled charges related to this case for $550 million. The bank neither admitted nor denied wrongdoing.
Tourre was accused of setting up a trade that was meant to fail, and of misleading investors about the nature of hedge fund manager John Paulson's involvement and position in the deal, among other things.
Tourre has yet to be sanctioned in the civil case, but it's likely that the SEC will seek to bar him from the securities industry for the rest of his life.
Here's the statement from the SEC:
“We are gratified by the jury’s verdict finding Mr. Tourre liable for fraud. We will continue to vigorously seek to hold accountable, and bring to trial when necessary, those who commit fraud on Wall Street. As shown by this verdict, we proved that Mr. Tourre, as a Goldman Sachs Vice President, put together a complicated financial product that was secretly designed to maximize the likelihood that it would fail, and marketed and sold it to investors without appropriate disclosure."
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