NEW YORK (Reuters) - The nine jurors who will decide the fate of former Goldman Sachs Group Inc trader Fabrice Tourre include a former stockbroker, a recent medical school graduate and a technical director of animated movies.
The makeup of the jury may be thanks at least in part to the influence of Julie Blackman, a social psychologist who has helped advise on jury selection in some of the biggest white-collar crime cases in the past decade.
Tourre, 34, is on trial in a civil proceeding in federal court in New York, in which the U.S. Securities and Exchange Commission accuses him of securities fraud.
In a trial that is expected to last three weeks, jurors will wade through a sea of financial jargon to decide whether Tourre deliberately misled investors in a instrument known as a synthetic collateralized debt obligation.
For Tourre, the important question is not only whether jurors understand the case but also whether they believe he did nothing wrong.
Blackman has written that college graduates and people with higher household incomes sympathize with white-collar defendants more often than non-graduates and those with lower incomes do.
In the jury selection process used by U.S. District Judge Katherine Forrest on Monday, nine potential jurors were selected at random from a pool of 48. Forrest then asked each of them basic questions about their occupations, their views of Wall Street and whether they understood English.
Those Forrest deemed unsatisfactory were replaced with others from the pool, with at least a dozen potential jurors rejected by Forrest.
The judge then held three rounds in which lawyers for Tourre and his accusers at the SEC could strike up to three potential jurors each.
The lawyers were not allowed to ask the jurors questions, and it was impossible to know which side had rejected which juror. But throughout the process, Blackman whispered and passed notes to one of Tourre’s lawyers, Sean Coffey.
In the first round, a female mortgage underwriter at Cardinal Mortgage Corp was excluded, as was a woman taking classes in options trading who said she had bought stock in a Chinese company that was “reporting results fraudulently.”
A civil engineering professor and a retired Food and Drug Administration compliance officer were excluded in the second round.
After much discussion between Tourre’s lawyers and Blackman, no jurors were excluded in the third round.
The court finally ended up with a panel of five women and four men, which also included a former special education teacher and an Episcopal priest.
Blackman, a vice president at a company called DOAR Litigation Consulting, started her career as an expert witness in cases involving battered women, then later began advising high-priced lawyers in white-collar and patent cases.
In February 2010 she co-wrote an online article, based on a telephone survey, saying college graduates and higher-income people were better-disposed toward white-collar defendants.
The article also contended that the “collapse of the economy has heightened prejudice against the wealthy making it hard for the presumption of innocence to flourish in these cases.”
“As far-fetched as it may seem to suggest that the wealthy are victims of injustice in the criminal justice system, recent events have made this so,” it said.
Blackman declined to comment on Tuesday.
Charles Stillman, a white-collar defense lawyer who hired Blackman for several cases, said jury consultants can help lawyers gain a better perspective on potential jurors.
Blackman, who has a doctorate in psychology, is “enormously insightful in this difficult process of trying to figure out who are the best people to give you the best chance of winning a case,” Stillman said.
While lawyers say a jury consultant can help, the help only goes so far, as some of Blackman’s cases show.
In 2005 she helped in the defense of former Tyco International CEO Dennis Kozlowski, who was convicted of looting the company.
And she took part in the defense of Goldman Sachs Group board member Rajat Gupta, who in 2012 was sentenced to two years in prison for feeding confidential information about the bank to hedge fund manager Raj Rajaratnam.
On Tuesday jurors heard a litany of terms uncommon outside the financial sector such as “credit default swaps,” “RMBS” and “ABX index.”
A couple of jurors took notes, but the majority did not. By the afternoon, one was slouching, her eyes often closed.
Among those testifying Tuesday, a current employee and a former employee of the hedge fund Paulson & Co Inc described the firm’s plan to bet against subprime mortgages and how the hedge fund came to be involved with Goldman Sachs, where Tourre worked.
Paolo Pellegrini, a former managing director who left Paulson & Co in 2008, said the housing market had “appreciated excessively and housing prices would either stabilize, flatten out or decline.”
Sihan Shu, a managing director at Paulson & Co, said the hedge fund “wanted to express a bearish view on the U.S. housing market via subprime mortgage backed securities.”
The SEC contends that Tourre failed to disclose to investors in a synthetic CDO known as Abacus that Paulson & Co had helped design it to fail and that the hedge fund was also betting against it.
The case is SEC v. Tourre, U.S. District Court, Southern District of New York, No. 10-03229.
Reporting by Nate Raymond and Bernard Vaughan; Editing by Eddie Evans and Douglas Royalty