Former Goldman Trader Is Found Liable in Mortgage Deal - NYTimes.com

Fabrice Fabre - who lamentably described himself as the Fabulous Fab in a now notorious email - has been found liable by a jury in an enforcement action by the S.E.C.  The case arises from the famed %500 million deal in which John Paulson bet against derivative securities while ACA management bet they bonds would perform.  Tourre was the Goldman Sachs broker who knew but did not disclose that Paulson was taking the short side, misleading investors with cagey formulations, while marveling at his own cleverness. Background information including the complaint can be found on this blog HERE (I have not however updated that page for since 2012) - GWC
Former Goldman Trader Is Found Liable in Mortgage Deal - NYTimes.com:

In finding Mr. Tourre liable for civil fraud, the jury concluded that he made a material — or important — misstatement to investors and failed to correct it. The S.E.C. had to prove its case by a preponderance of the evidence, a lower standard than criminal cases.

In deliberating the S.E.C.’s most serious claims, the jury was instructed to weigh whether Mr. Tourre intended to defraud investors, or at least acted recklessly. The lesser charges required only that Mr. Tourre acted negligently.

In 2010, the S.E.C. had also charged Goldman with fraud. Not long after the case was announced, the bank settled for $550 million, a record fine at the time.

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