Tourre tries to play down 'fabulous Fab' email
NEW YORK, July 25
NEW YORK, July 25 (Reuters) - Former Goldman Sachs trader Fabrice Tourre on Thursday played down the importance of an email that has come to define his securities fraud trial, saying it was just a "silly, romantic" message in a moment of stress.
Before the trial, Tourre's lawyers sought unsuccessfully to block the U.S. Securities and Exchange Commission from using the email, in which Tourre called himself "the fabulous Fab," to support its claim he misled investors in a 2007 deal.
"It was a silly, romantic email to my girlfriend at the time as I was very stressed that day," Tourre said on Thursday.
Tourre spoke during his second day of an expected three days of testimony in what has become the highest-profile trial to spill out of the SEC's investigations of the 2008 financial crisis.
The SEC accuses Tourre of failing to tell investors that Paulson & Co Inc, the hedge fund of billionaire John Paulson, intended to bet against Abacus 2007-AC1, a $2 billion offering tied to subprime mortgage bonds known as a synthetic collateralized debt obligation.
Tourre denies wrongdoing. Goldman Sachs, originally a co-defendant when the case was filed in 2010, paid $550 million to settle the claims without admitting or denying wrongdoing.
The email at issue Thursday, cited in the lawsuit when it was filed in 2010, became the basis for Tourre's headline-grabbing nickname, "Fabulous Fab."
Tourre had sent the email on Jan. 23, 2007, to Marine Serres, his girlfriend at the time who worked at Goldman Sachs in London.
Writing in French, Tourre said of the financial markets: "The whole building is about to collapse anytime now."
"Only potential survivor, the fabulous Fab ... Standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities!!!"
Matthew Martens, a lawyer for the SEC, probed whether financial products Tourre constructed himself were "monstrosities," a claim the former Goldman Sachs Group Inc vice president rejected.
"I didn't create any monstrosities," he said.
The January 2007 email was one of several to Tourre's girlfriend the SEC introduced to establish his thinking at the time about the subprime mortgage market as he put together Abacus.
In one sent Feb. 20, 2007, to his girlfriend, Tourre emailed her the address for www.mortgageimplode.com, saying: "I love this website :)".
Tourre acknowledged Thursday he was "more pessimistic than optimistic," given price declines being experienced in the market for subprime-mortgage-backed securities.
The case is SEC v. Tourre, U.S. District Court, Southern District of New York, No. 10-03229.
- Obama makes rare campaign trail appearance, people leave early
- Two arrested in death of Saudi student in California: report
- U.S. military says air-drops weapons for Kurdish fighters near Kobani
- Hong Kong crisis deepens after weekend clashes, talks set for Tuesday |
- World stocks advance on strong data, earnings