* Judge rejects in part, grants in part motion to dismiss
* Cites U.S. Supreme Court on securities laws
* Goldman closes higher, but down 26 pct since lawsuit (Adds background and details from ruling)
By Grant McCool and Jonathan Stempel
NEW YORK, June 10 (Reuters) - The top U.S. securities regulator can pursue its high-profile civil fraud lawsuit against a Goldman Sachs Group Inc (GS.N) vice president over a product linked to subprime mortgages, a federal judge ruled.
U.S. District Judge Barbara Jones rejected the request by the executive, Fabrice Tourre, to dismiss U.S. Securities and Exchange Commission claims accusing him of violating a federal law designed to stop the fraudulent sale of securities.
She dismissed some SEC claims, citing a recent U.S. Supreme Court ruling limiting the reach of federal securities laws.
The SEC sued Goldman and Tourre in April 2010, accusing them of failing to tell investors the Paulson & Co hedge fund, run by billionaire John Paulson, helped choose and bet against the subprime residential mortgage-backed securities underlying Abacus 2007-AC1, a collateralized debt obligation.
Goldman settled with the SEC last July for $550 million without admitting wrongdoing, but remains the subject of many lawsuits by investors who say the Wall Street bank's actions and the resulting negative publicity depressed its share price.
Tourre is the only individual sued in the case.
"We are pleased that Judge Jones has dismissed a substantial portion of the SEC's case and confident we will prevail on the merits on the remaining allegations at trial," said Pamela Chepiga, a lawyer for Tourre.
SEC spokesman John Nester said: "We are pleased with the court's ruling and look forward to presenting our fraud charges against Mr. Tourre in court."
Goldman spokesman David Wells declined to comment on the ruling. He said Tourre remains an employee, but is on leave.
Citing the June ruling by the U.S. Supreme Court in Morrison v. National Australia Bank Ltd (NAB.AX), Jones said the SEC could not pursue a fraud claim related to Germany's IKB Deutsche Industriebank AG IKBG.DE, which the regulator said lost nearly its entire $150 million investment in Abacus.
She also threw out a fraud claim related to ABN Amro Bank, later part of Royal Bank of Scotland Group Plc (RBS.L), which had assumed some credit risk associated with Abacus.
But she said that, by alleging Tourre was "principally responsible" for Abacus and its marketing materials, the SEC sufficiently alleged he violated the law barring fraudulent sales "when Goldman's structured product syndicate desk invited institutional investors to contact Goldman's sales representatives in New York regarding Abacus."
She also said Tourre must face SEC claims he misled ACA Capital Holdings Inc, which helped Paulson choose securities backing Abacus and sold protection against their default, by failing to reveal Paulson was betting against the debt. ACA had also bought $42 million of Abacus notes.
Goldman shares closed up $2.39, or 1.8 percent, at $135.92 on Friday. They have fallen 26.2 percent since April 15, 2010, the day before the SEC filed its lawsuit.
The case is SEC v Goldman Sachs & Co et al, U.S. District Court, Southern District of New York, No. 10-03229. (Reporting by Grant McCool and Jonathan Stempel; editing by Robert MacMillan and Andre Grenon)