Fab's Fine Line Between Illegal and Idiotic

The picture you get from reading about the testimony in the Fabrice "Fabulous Fab" Tourre case is of a bunch of people behaving like idiots. Tourre appears willing to say anything to potential buyers to close the deal. The people buying his mortgage bondsdon't inquire as to whether hedge-funder John Paulson's "equity perspective" is equivalent to an "equity investment"; they just assume it is, and give Fab Tourre a bunch of money.

But was all this illegal? My impression from watching coverage of the case was that the Securities and Exchange Commission's case against Tourre was pretty weak. That's why his lawyers rested without calling any witnesses. And these defenders aren't arrogant idiots; one securities lawyer I know says they're "top notch."