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.
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 editors responsible for this story: Peter Eichenbaum at email@example.com Steven Crabill, Dan Reichl