A once high-flying Goldman Sachs trader dubbed “Fabulous Fab” was ordered Wednesday to pay more than $825,000 in one of the prominent cases stemming from the mortgage meltdown that helped spark the Great Recession.
Ruling in Securities and Exchange Commission v. Fabrice Tourre,10 Civ. 3229 (KBF), a civil case that regulators called a symbol of “Wall Street greed,” Southern District Judge Katherine Forrest (See Profile) decided Fabrice Tourre should pay a $650,000 penalty and give up more than $175,000 of his $1.5 million-plus bonus for 2007.
Tourre, who was found liable after a trial last summer, is now a doctoral student in macroeconomics at the University of Chicago. He said he was weighing his next move in what his lawyers have depicted as a case of scapegoating but added that he was focused on pursuing his academic career.
The Securities and Exchange Commission, which sued Tourre, had asked for higher penalties but hailed the decision as a strong message nonetheless.
“The ruling reflects the SEC’s intent of pursuing meaningful sanctions to punish individuals responsible for misconduct and deter others from violating the federal securities laws,” SEC Enforcement Director Andrew Ceresney said in a statement.
The SEC initially also sued Goldman Sachs, which settled in 2010 by paying a record $550 million fine without admitting or denying wrongdoing. The bank declined to comment Wednesday.
The SEC said Tourre, a French-born Stanford University graduate who became a Goldman vice president, duped institutional investors about subprime mortgage securities that he knew were fated to sour.
Forrest said Tourre misled investors by email, phone and via marketing materials over seven months of deception.
“He has shown no remorse or contrition,” she added.
She barred him from asking Goldman to pay for the penalties.