Judge in 'Fabulous Fab' trial tells lawyers to keep it simple

Gavel

The Manhattan judge hearing the Fabrice Tourre securities-fraud trial urged lawyers to 'have a heart' and not assume jurors speak Wall Street.

Bloomberg News reports that the U.S. Securities and Exchange Commission sued Tourre and Goldman Sachs in 2010 over Abacus 2007-AC1, a synthetic collateralized debt obligation, in which investors betting on mortgage bonds lost more than $1bn.

The agency claims Tourre concealed the role of Paulson & Co., the hedge fund run by John Paulson, in selecting the assets in the Abacus portfolio - assets Paulson was betting would fail. Goldman Sachs paid a then-record $550m fine to settle the claims.

CDOs were one thing the judge in charge of the case had in mind in making her keep-it-simple request to lawyers.

'A synthetic CDO is gibberish unless you explain it', U.S. District Judge Katherine Forrest told the lawyers for both sides before the trial started Monday morning. 'Mere mortals don’t know what a trading desk is'.

Both sides appeared to try to simplify their cases in their opening statements, with SEC lawyer Matthew Martens likening Abacus to a basket of rotten apples and Pamela Chepiga, a lawyer for Tourre, comparing it to a fantasy baseball team.

Hit the link below to access the complete Bloomberg article:

Tourre Lawyers Urged to Cut Down Jargon for Jurors’ Sake

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