| NEW YORK
NEW YORK, Aug 1 (Reuters) -
NEW YORK Aug 1 Jurors considering the fate of
Fabrice Tourre sought clarity Thursday on two of the lesser
charges facing the former Goldman Sachs Group Inc vice
On the second day of deliberations in a civil fraud trial
brought by the U.S. Securities and Exchange Commission, jurors
passed three notes to the federal judge in Manhattan presiding
over the case.
Two notes concerned what jurors need to find to hold Tourre
liable on two counts that require at least a showing of
negligence for there to be liability.
Other counts facing Tourre have a higher standard requiring
a finding he acted with intent to defraud or with reckless
disregard for the truth.
The SEC accuses Tourre of failing to tell investors that the
hedge fund of billionaire John Paulson selected mortgage
securities linked to a 2007 investment vehicle called Abacus
2007-AC1 and planned to short - or bet against - the deal.
The SEC also contends that Tourre misled ACA Capital
Holdings Inc, a company hired to select assets linked to Abacus,
into thinking Paulson & Co Inc would invest in the equity of the
synthetic collateralized debt obligation.
Tourre denies wrongdoing. Goldman, which had been a
defendant when the lawsuit was filed in 2010, settled for $550
million without admitting or denying wrongdoing.
The two notes on the elements of the law for the so-called
negligence claims stemmed from charges the SEC brought under the
Securities Act of 1933.
In one of the notes, jurors asked whether either Tourre's
base salary or the amount of money Goldman earned on Abacus
satisfies a requirement that "money or property" be obtained to
hold him liable.
Outside of the jurors' presence, Matthew Martens, a lawyer
for the SEC, urged the judge to say either would work. Goldman
Sachs earned $15 million in fees on Abacus, and Tourre said he
earned $1.7 million in salary and bonus in 2007.
"We believe base salary should be enough on whether he
received money or property," Martens said.
U.S. District Judge Katherine Forrest expressed skepticism
that a base salary alone rather than Tourre's bonus tied to
Goldman profits would satisfy the law.
When jurors returned, the judge referred them to
instructions she gave Wednesday, in which she said it would be
sufficient to find he obtained compensation directly or
indirectly tied to a misstatement or omission.
She told jurors that any money Goldman earned on Abacus
wouldn't suffice "unless it found its way down to Mr. Tourre in
In another note also addressing a charge requiring a finding
of at least negligence, jurors asked about the SEC's claim that
Tourre engaged in the offer or sale of Abacus notes and in two
credit default swaps.
"Do we need to find that he operated as a fraud or deceit
for all three of those or is any one of them sufficient to find
liability on this charge?" the note asked.
Forrest told jurors any one of those securities offers or
sales would satisfy the charge.
The case is SEC v. Tourre, U.S. District Court, Southern
District of New York, No. 10-03229.