Ex-Goldman trader Tourre won't appeal SEC fraud case verdict
TeNEW YORK (Reuters) - Former Goldman Sachs Group Inc trader Fabrice Tourre said Tuesday he would not appeal an order requiring he pay more than $825,000 after a jury found him liable for defrauding investors in a failed mortgage deal.
Tourre's announcement came on the deadline to lodge an appeal in the case, ensuring the U.S. Securities and Exchange Commission's August 2013 trial victory remains undisturbed.
"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.
He said he looked forward to finishing his studies for a doctorate in economics, which he has been pursuing at the University of Chicago.
The SEC and Goldman Sachs declined comment.
Tourre, 35, became a symbol of the 2008 financial crisis after the SEC sued him and Goldman in 2010 for misleading investors in a synthetic collateralized debt obligation, or CDO, linked to mortgages called Abacus 2007-AC1.
The SEC accused Tourre, a vice president at Goldman, of concealing from investors that Paulson & Co, the hedge fund of billionaire John Paulson, was involved in putting Abacus together and was betting against it.
The SEC also contended Tourre misled ACA Capital Holdings Inc, which helped choose Abacus assets, into believing Paulson would be an equity investor in the CDO, rather than short it as part of a massive wager against subprime mortgages.
Paulson made about $1 billion by betting against Abacus, while investors lost the same amount, the SEC said.
Goldman in July 2010 reached a related $550 million settlement with the SEC. It did not admit wrongdoing but acknowledged and expressed regret that its marketing materials were incomplete.
In August, a federal jury found Tourre liable on six of seven civil charges related to Abacus. U.S. District Judge Katherine Forrest subsequently in March ordered him to pay $856,613.
Forrest at the same time denied the SEC's request for an injunction barring Tourre from future securities law violations, saying there was no indication the French citizen would return to the field after finishing his studies in June 2016.
The judge said the SEC could re-apply for an injunction if he returns to the securities industry in the next three years.
The case is SEC v. Tourre, U.S. District Court, Southern District of New York, No. 10-03229.
(Reporting by Nate Raymond in New York; Editing by Meredith Mazzilli and David Gregorio)