Ex-Goldman trader Tourre seeks to overturn verdict

Ex-Goldman Sachs trader Fabrice Tourre has asked a US judge to dismiss a verdict that he defrauded investors over mortgage securities, or order a new trial in the case. Tourre's attorneys argued in a court filing late Monday that the jury's verdict in his August trial, which arose from the excesses that led to the 2008 financial crisis, should be rejected because of inconsistency and a lack of evidence. The jury had ruled against Tourre on six of seven counts, concluding that he defrauded investors who bought mortgage-linked securities that plunged in value after the housing bust. The jury's conclusions "either lack evidentiary support" or included findings that were "seriously erroneous," the brief argued. If allowed to stand, the verdict "would work a manifest injustice to Mr. Tourre." Tourre, a French national self-nicknamed "Fabulous Fab", was presented by government attorneys as a symbol of Wall Street greed in the lead-up to the financial crisis. He had been accused of misleading investors on the risks inherent in a synthetic collateralized debt obligation (CDO) he helped prepare and market. Rather than being a safe investment, it proved to be highly risky and it plunged in value after the housing bust, with investors losing some $1 billion while Goldman earned significant profits. Tourre's defense team argued that there was no evidence presented in the trial that Tourre "obtained money or property" from the transaction. Further, when the jury queried US Judge Katherine Forrest on whether Tourre's compensation was linked to the specific deal, her response that such a tie was "possible" between the two was "incorrect and misleading," Tourre's brief said. Defense attorneys also noted that the jury had found that Tourre was "not liable" for making material misstatements or omissions in the sale of the securities. Three counts in which Tourre was found liable were "premised" on the allegation rejected by the jury, they argued. As a result, "those claims lack sufficient other evidence to survive scrutiny," the brief said. The Securities and Exchange Commission, which counted the Tourre case as a rare court win in a high-profile banking case, must respond to the Monday filing by October 30. The SEC did not immediately respond to a request for comment. Tourre has not yet been sentenced in the case. Possible penalties include a large fine and a barring from future work in the securities industry.