By Sarah N. Lynch
WASHINGTON, Sept 27 Matthew Martens, the top
trial lawyer at the U.S. Securities and Exchange Commission who
led the agency to victory in its blockbuster civil fraud case
against Goldman Sachs Vice President Fabrice Tourre, is
leaving the SEC at the end of September.
The SEC said its current deputy chief litigation counsel,
Matthew Solomon, will take over the top position.
The SEC's case against Tourre was one of the most
high-profile matters to emerge out of the 2007-2009 financial
crisis. At the heart of the SEC's case was whether Tourre had
misled investors in a synthetic collateralized debt obligation
(CDO) called Abacus 2007-AC1.
The SEC said Tourre, who once referred to himself as "the
fabulous Fab" in an email, should have let investors know that
Paulson & Co Inc, the hedge fund run by billionaire John
Paulson, had helped choose the subprime mortgage securities
underlying the CDO and was betting against it.
Leading up to the trial against Tourre, many critics openly
questioned the strength of the SEC's case, saying the agency was
wrong to target a low-level Goldman employee.
Goldman Sachs had previously settled the matter with the SEC
for $550 million; no high-level executives were charged in the
Martens was able to convince a jury that Tourre was liable
for fraud, marking what most consider to be the highlight of his
three years working at the SEC.
Martens' plans to leave the SEC this fall were widely
Reuters first reported in May, well before the Tourre trial
began, that Martens was testing the waters for prospective
employment at several law firms
At that time, he was inquiring internally about whether
certain firms including Kirkland & Ellis; Paul, Weiss, Rifkind,
Wharton & Garrison; WilmerHale; Latham & Watkins, and Cleary
Gottlieb Steen & Hamilton were representing clients in SEC
In some instances, Martens recused himself from working on
those cases in order to comply with strict ethics rules that
prevent employees from working on matters involving prospective
The SEC's announcement on Friday did not say where Martens
plans to go next. Martens declined to comment. A source familiar
with the matter said he had not decided.
Solomon has served as second in command in the SEC's trial
unit since June 2012.
Before working at the SEC, Solomon was a federal prosecutor
for more than 10 years.