Judge: Ex-Goldman Trader 'Fabulous Fab' to Pay $825,000

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Ex-Goldman VP Tourre Ordered to Pay More than $825,000 in SEC Case
Peter Foley/Bloomberg via Getty Images Fabrice Tourre, a former vice president at Goldman Sachs, left, leaves federal court with his attorney Pamela Chepiga last August.
By Dunstan Prial

A federal judge ordered former Goldman Sachs (GS) bond salesman Fabrice Tourre to forfeit a $175,000 bonus and pay a $650,000 fine for misleading investors in the run up to the 2008 financial crisis.

A jury in August found Tourre guilty of defrauding investors in one of the few cases in which a Wall Street executive faced a trial in connection with actions regulators said contributed to the economic meltdown.

Tourre was charged by the Securities and Exchange Commission with lying to investors %VIRTUAL-article-sponsoredlinks%while marketing a complicated investment product called a collateralized debt obligation filled with shaky mortgage loans that Tourre knew would likely plunge in value.

U.S. District Judge Katherine Forrest ordered Tourre to turn over the $175,463 in bonus money and prohibited him from seeking reimbursement from Goldman Sachs for the $650,000 fine.

Specifically, the SEC claimed that in 2007 Tourre, then a 28-year-old vice president with Goldman, worked with hedge fund guru John Paulson to create an investment product called Abacus 2007 AC-1 loaded with mortgage-backed securities that both Tourre and Paulson expected to sour.

Tourre was accused of failing to reveal Paulson's role and, moreover, not telling investors that Paulson was betting the securities would tank.

Tourre became notorious partly due to an email he sent to a former girlfriend in which he not only referred to himself as "Fabulous Fab" but also seemingly made light of his role creating investment products at Goldman that were bound to fail once the U.S. housing market collapsed.

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Judge: Ex-Goldman Trader 'Fabulous Fab' to Pay $825,000

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