| NEW YORK, July 25
NEW YORK, July 25 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
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
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
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.