Lawyers for the only Goldman Sachs (GS.N) employee charged over the Abacus subprime mortgage transaction have asked a judge for permission to appeal one of the legal claims U.S. securities regulators brought against him.
Lawyers for Fabrice Tourre, a Goldman vice president, are seeking approval to appeal a June 10 court order.
That order upheld the U.S. Securities and Exchange Commission's claim about offers of the product that it accused Tourre of making to German bank IKB Deutsche Industriebank AG IKBG.DE and Dutch bank ABN Amro NV.
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, had helped to choose and bet against the subprime residential mortgage-backed securities underlying Abacus 2007-AC1, a collateralized debt obligation.
Tourre is hoping a successful appeal to the 2nd U.S. Circuit Court of Appeals would undercut the SEC case, and eliminate the need for extensive document review and litigation in several foreign courts, including in Europe.
Such efforts "will be wholly unnecessary if the Court of Appeals holds that the preparatory, pretransactional conduct alleged against Mr. Tourre does not constitute an 'offer' to IKB and ABN," Tourre's defense lawyers wrote on Thursday to U.S. District Judge Barbara Jones in Manhattan.
"An immediate appeal will profoundly affect the conduct of this proceeding" and "avoid substantial waste," they added.
Goldman settled with the SEC in July 2010 for $550 million without admitting wrongdoing.
The bank remains subject to lawsuits by investors who say the Wall Street bank's actions and the resulting negative publicity depressed its share price.
The SEC opposes Tourre's request for a so-called interlocutory appeal, having argued in September 12 court papers that the circumstances were not unusual enough to warrant one.
It also said the defense argument was "premised primarily on a mischaracterization" of a 2010 ruling by the U.S. Supreme Court in Morrison v. National Australia Bank Ltd (NAB.AX) that limited U.S. litigation over foreign securities transactions.
ABN Amro is now part of Royal Bank of Scotland Group Plc (RBS.L), which had assumed some credit risk associated with Abacus.
An SEC spokesman had no comment on Tourre's latest court filing.
The case is SEC v Goldman Sachs & Co et al, U.S. District Court for the Southern District of New York, No. 10-03229.
(Reporting by Grant McCool; Editing by Ted Kerr)