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Goldman Exec Tourre Mortgage Fraud Appeal

reversemortgagedaily.com | January 9, 2014

By Adam Klasfeld

(CN) - A former Goldman Sachs executive was properly nailed for his role in a failed mortgage deal that cost investors $1 billion without proof that he received a "fraud bonus," a federal judge ruled.

In a major win for the Securities and Exchange Commission in August, a federal jury found that Fabrice Tourre, 34, committed six of seven fraud violations related to misleading investors in a deal known as Abacus 2007-AC1.

Jurors found that Tourre had failed to disclose that hedge fund billionaire John Paulson was betting against the mortgage securities that he helped select.

The deal earned Paulson billions, and cost investors the same.

Tourre left Goldman in 2012. Goldman settled with the SEC for $550 million in July 2010 without admitting or denying any wrongdoing.

Lawyers for Tourre sought to overturn the jury's decision by arguing that there was no proof that he received money or property through a false statement. Tourre did, however, collect a base salary and a bonus.

U.S. District Judge Katherine Forrest said Tuesday that it was "simply wrong" to believe the SEC could not win its case without showing that Tourre's payments were explicitly earmarked for the fraud.

The statute "does not require the SEC to show that a banker like Tourre received some sort of additional 'fraud bonus' on top of his base salary in order to establish liability; as the statute clearly states, the SEC must prove that Tourre obtained money or property by means of a material misstatement or omission," according to the ruling.

An attorney for Tourre did not immediately respond to a request for comment.

 

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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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