Frenchman 'Fabulous Fab' Tourre found to be fraud
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A New York jury has found French trader “Fabulous Fab” Tourre guilty of defrauding investors in a rare case arising from the US’s subprime crisis and the economic crash that followed it. He is likely to face a large fine and a ban on work in financial securities.
Fabrice Tourre a 34-year-old who grew up in a middle-class family in the Paris suburbs, was found guilty on six of the seven counts of fraud that featured in the case brought by the US’s Security and Exchange Commission after a two-week trial.
Tourre’s employer, Goldman Sachs, had already settled with the agency for 550 million dollars in 2010, although it did not officially admit that it had been at fault.
He had designed the “Abacus” system, which packaged securities backed by mortgages that in many cases had been sold to families that did not have the means to repay them.
The prosecution argued that the package was “secretly designed to maximise the likelihood that it would fail” and that it was marketed “without appropriate disclosure”.
Investors, including financial group ACA, Dutch bank ABN-Amro and Germany’s IKB, lost about one billion dollars, the agency estimates, while hedge fund leader John Paulson made about one billion and Goldman Sachs took 15 million dollars in commissions.
Tourre’s nickname was taken up by the press after the court heard excerpts from emails to a girlfriend in which he used it himself and appeared to sneer at small borrowers, undermining his defence’s argument that he was a small fish who had been picked on by the government agency.
Since the case has been brought against him he has done humanitarian work in Rwanda and started studies in economics at the University of Chicago.
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