Goldman's Fabulous Fab to break silence, may claim he's a scapegoat


Fabrice Tourre, the former Goldman Sachs VP facing civil fraud claims over a mortgage bond debacle that made his client $1bn, may say when he takes the witness stand today that he’s a scapegoat who was only trying to do his best for the firm.

Bloomberg News reports that Tourre, now a 34-year-old graduate student, is scheduled to testify before a jury in Manhattan federal court about his role in structuring and selling a 2007 mortgage-backed investment that lost a group of investors about $1bn when the mortgage market crashed.

It will be his first chance to make good on a promise, made before Congress in April 2010, to fight the U.S. Securities and Exchange Commission’s allegations that he 'categorically' denied.

Tourre’s testimony comes near the end of two weeks of evidence against him by the SEC, whose lawyers will try to use Tourre’s own words to show he misled investors about the role of Paulson & Co., the hedge fund run by John Paulson, in helping select the assets behind the investment, which it then bet against.

His best defense may be to emphasize his relative lack of stature at Goldman Sachs at the time of the Abacus deal, said Jacob Frankel, a former SEC lawyer not involved the case.

'He was a small player and nobody was fooled here', said Frenkel, now with Shulman Rogers Gandal Pordy & Ecker PA in Potomac, Maryland. 'I think that’s the most powerful image he can deliver'.

Hit the link below to access the complete Bloomberg article:

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