Ex-Goldman Sachs Trader Tourre Says He Won’t Appeal

Fabrice Tourre, the former Goldman Sachs Group Inc. (GS) vice president found liable for his part in selling a pre-crisis mortgage security that lost value, said he won’t file an appeal in the civil case.

“While my lawyers have advised me there are strong grounds to appeal, I prefer to move forward with my education and close this difficult chapter of my life,” Tourre said in a statement today. “I look forward to finishing my Ph.D. in economics and to making meaningful contributions to my field.”

Tourre, 35, was found liable Aug. 1 after a jury trial at which the U.S. Securities and Exchange Commission claimed he intentionally misled investors in a subprime-mortgage vehicle called Abacus 2007-AC1. In March, he was ordered to pay more than $825,000 in penalties.

The lawsuit was one of the government’s most prominent efforts to fix responsibility for the housing market crash, which helped precipitate the worst economic downturn since the 1930s. Critics have faulted the SEC for not doing more to police the abuses that helped lead to the crisis or to pursue top financial executives they say are responsible.

Goldman Sachs, which paid Tourre’s legal fees, settled SEC claims over the Abacus transaction in July 2010 for $550 million, a record at the time. No senior Goldman Sachs executives were questioned in Tourre’s trial.

Photographer: Peter Foley/Bloomberg

Fabrice Tourre, a former vice president at Goldman Sachs Group Inc., center, exits federal court with his attorney Pamela Chepiga in New York, U.S., on Thursday, Aug. 1, 2013. Close

Fabrice Tourre, a former vice president at Goldman Sachs Group Inc., center, exits... Read More

Close
Open
Photographer: Peter Foley/Bloomberg

Fabrice Tourre, a former vice president at Goldman Sachs Group Inc., center, exits federal court with his attorney Pamela Chepiga in New York, U.S., on Thursday, Aug. 1, 2013.

Tourre lied about the role played by the hedge-fund firm run by billionaire John Paulson, which helped choose the securities underlying Abacus then made a billion-dollar bet it would fail, the SEC said.

U.S. District Judge Katherine Forrest ruled in March that Tourre, who is in the middle of a six-year economics Ph.D. program at the University of Chicago, couldn’t seek reimbursement from Goldman Sachs for $650,000 in civil penalties and repaying $175,463 of his 2007 bonus, plus interest.

To contact the reporter on this story: Michael J. Moore in New York at mmoore55@bloomberg.net

To contact the editors responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net Steven Crabill, Dan Reichl

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.