Fabrice Tourre, the ex-Goldman Sachs (NYSE:GS) trader, was found liable by a federal jury in six out of seven counts of securities fraud in a sticky $1 billion subprime mortgages collateralized debt obligation deal.
Tourre -- nicknamed the “Fabulous Fab” -- has yet to be sentenced, though the ruling will likely bar him from the securities industry for life.
“We are gratified by the jury’s verdict finding Mr. Tourre liable for fraud,” Matthew Martens, the Securities and Exchange Commission lawyer, said in a statement. “As shown by this verdict, we proved that Mr. Tourre, as a Goldman Sachs vice president, put together a complicated financial product that was secretly designed to maximize the likelihood that it would fail, and marketed and sold it to investors without appropriate disclosure.”
The verdict offers vindication to the federal agency that critics have accused of making scapegoats of lower-wrung Wall Street employees to prove wider failings in the financial industry.