In a victory for the Securities and Exchange Commission, a federal judge in Manhattan will limit the evidence that Fabrice Tourre can present to jurors about the numerous lawyers who reviewed the transaction at the heart of the SEC's fraud case against the former Goldman Sachs & Co. trader.

As we reported last week, the SEC had filed a pretrial motion to bar Tourre from raising an advice of counsel defense or emphasizing that the offering documents for the ABACUS 2007-AC1 collateralized debt obligation had been reviewed by in-house and outside lawyers for Goldman and others. Touree's legal team, led by Pamela Chepiga of Allen & Overy, maintained that their client wasn't raising an advice of counsel defense, but simply wanted to explain the "institutional process" at Goldman that included layers of legal review for the CDO.

Tourre is charged with failing to disclose to investors that hedge fund manager John Paulson selected reference assets for the ABACUS CDO and then bet against the instrument, expecting it to fail. Goldman Sachs settled parallel SEC claims for $550 million in 2010.

In a ruling issued Tuesday, U.S. District Judge Katherine Forrest barred Tourre's defense counsel from referring in their opening statement to the presence and involvement of lawyers in the ABACUS deal. She also precluded them during the rest of the trial from "placing undue focus" on the fact that counsel reviewed disclosure obligations related to the CDO.

"It would be confusing and unduly prejudicial for Tourre to present extensive evidence on the presence and involvement of lawyers—who are presumably paid to ensure that any disclosures comply with the relevant legal requirements—while at the same time professing not to have relied on their advice in preparing or disseminating those disclosures," Forrest wrote. "Tourre argues that the presence of lawyers is relevant to the overall context of the transaction, but that is such a fine-grained distinction from a reliance on counsel defense, that it would likely confuse the jury."

Forrest will otherwise allow Touree to explain Goldman's institutional process and present evidence showing he was not primarily responsible for the transaction.

The trial is scheduled to begin July 15. Tourre's counsel declined to comment.