New York (HedgeCo.Net) – Fabrice Tourre, the former Goldman Sachs hedge fund trader with the nickname “Fabulous Fab” has been found liable for fraud by a jury in Manhattan on six of seven counts of fraud.
The SEC in 2010 filed securities fraud charges against Goldman, Sachs & Co. and an employee, Fabrice Tourre, for making material misstatements and omissions in regards to a CDO that contributed to the financial crisis by magnifying losses associated with the downturn in the United States housing market. The failed mortgage deal cost investors approximately $1 billion.
“The SEC had accused Tourre of misleading institutional investors about subprime mortgage securities that he knew were doomed to fail, setting the stage for a valued Goldman hedge fund client, Paulson & Co., to secretly bet against the investment.” USA Today reports.
The SEC fined Goldman Sachs over $550 million, ordering a sweeping review of the companies business standards. SEC lawyers called Torre “The face of Wall Street greed.” He faces potential fines and a possible ban from the financial industry.
“We are gratified by the jury’s verdict,” said Andrew Ceresney, co-director of the regulator’s enforcement division, Bloomberg reports. “We will continue to vigorously seek to hold accountable, and bring to trial when necessary, those who commit fraud on Wall Street.”
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