Fabrice Tourre Nailed on 6 of 7 Counts

     MANHATTAN (CN) – A federal jury Thursday found Goldman Sachs Group’s former vice president Fabrice Tourre liable for six of seven fraud charges brought against him by the SEC for his role in a failed mortgage deal that cost investors $1 billion.
     It was a major win for the SEC, which has been accused of lax enforcement against major players and institutions responsible for the financial crisis.
     “We are gratified by the jury’s verdict,” Andrew Ceresney, co-director of the SEC¹s Division of Enforcement, said in a statement. “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.”
     The SEC sued Tourre, 34, in April 2010, claiming he misled investors in a deal known as Abacus 2007-AC1, by failing to disclose that hedge fund billionaire John Paulson was betting against the mortgage securities that he helped select.
     The deal earned Paulson billions, and cost investors the same.
     Tourre left Goldman in 2012. Goldman settled with the SEC for $550 million in July 2010 without admitting or denying any wrongdoing.
     U.S. District Judge Katherine Forrest will determine Tourre’s financial penalties, and asked both sides to submit proposals by Aug. 23 for what to do next.

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