Fabrice Tourre, Goldman Sachs VP, Charged With Securities Fraud (PHOTOS)

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The 31-year-old Goldman Sachs vice president charged with securities fraud by the Securities and Exchange Commission on Friday is Fabrice Tourre, a French graduate of Stanford known for his "goofy sense of humor" who has worked at the Wall Street firm since July 2001.

On Monday, the firm told CNBC that Tourre remains an employee, has not been suspended and made a "personal decision to take a bit of time off." It is not clear if Tourre received a share of the $5 billion in bonuses announced by Goldman.

In an email to a friend on January 23, 2007, the London-based trader called himself "The Fabulous Fab" and warned about the coming collapse in the subprime mortgage securities market, according to the SEC complaint. In the message, he also dramatically expresses his own lack of foresight about the consequences of his risky trading activity:

"More and more leverage in the system. The whole building is about to collapse anytime now... Only potential survivor, the fabulous Fab[rice Tourre]... standing in the middle of all these complex, highly leveraged exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!"

The Telegraph of London ran the following photo of Tourre with its story on the trader:

Here's an AP photo from the latest hearing:

Last December, the New York Times reported on Tourre's role in helping create Abacus deals, which allowed investors to bet for or against mortgage securities through credit default swaps:

Mr. Egol and Fabrice Tourre, a French trader at Goldman, were aggressive from the start in trying to make the assets in Abacus deals look better than they were, according to notes taken by a Wall Street investor during a phone call with Mr. Tourre and another Goldman employee in May 2005.

On the call, the two traders noted that they were trying to persuade analysts at Moody's Investors Service, a credit rating agency, to assign a higher rating to one part of an Abacus C.D.O. but were having trouble, according to the investor's notes, which were provided by a colleague who asked for anonymity because he was not authorized to release them. Goldman declined to discuss the selection of the assets in the C.D.O.'s, but a spokesman said investors could have rejected the C.D.O. if they did not like the assets...

"Egol and Fabrice were way ahead of their time," said one of the former Goldman workers. "They saw the writing on the wall in this market as early as 2005." By creating the Abacus C.D.O.'s, they helped protect Goldman against losses that others would suffer.

Tourre, a midlevel trader was richly rewarded for taking big risks on mortgage loans, receiving $2 million in 2007, reports the Wall Street Journal:

"That compensation was due partly to his success with the deal at the center of the controversy, according to one of those people."

Tourre, who is represented by Pamela Chepiga at Allen & Overy LLP, did not respond to requests for comment. He was unavailable when a reporter from efinancialnews.com called his trading desk in London and a GS colleague hung up the phone when asked if Tourre was still at his desk. Goldman says it has done nothing wrong and is fighting the charges, filed in a New York federal court.

Here is the Financial Industry Regulatory Authority's BrokerCheck report on Tourre:

Fabrice Tourre

Comments

[jjden]

11:48 PM on 04/27/2010

We need a few more supercilious brat grads of prestigious universities running things. A bunch of butt kissing charlatans is all they are. They need their hind ends kicked in a major way.

[underdog1]

02:44 PM on 04/27/2010

I'm watching the hearing now. For a guy who is a supposed Ivy league graduate and VP of a bulge bracket firm, he sure has poor communications skills.

[Norak]

04:38 PM on 04/28/2010

But he must have nailed math class!

[spiritpony1]

08:48 PM on 04/21/2010

here is a 31 ---yes----year old French fop (prolly why they gave him the job, even tho he is not bald like so many of the high muckies at GS-------) who so enamored the co., they gave him VP job--------who knows WHY a 31 year old, regardless of perceived elan and intellect, but minimal larger life experience would be given the job to put this deal together------

[gmb007]

07:22 PM on 04/20/2010

"More and more leverage in the system. The whole building is about to collapse anytime now... Only potential survivor, the fabulous Fab[rice Tourre]... standing in the middle of all these complex, highly leveraged exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!"

My God, the ego! Even for Wall Street, this level of arrogance is beyond the pale.

And referring to himself in the third person? As in the royal "we". What does that tell you? Plotting massive destruction...and his own survival. Freud would have field day with this guy. Narcissistic sociopath.

His words above are THE very definition of calculated, predatory, monopolistic capitalism - a scorched-earth-take-no-prisoners mindset of pure hedonism, devouring everything and everyone in its path:

Men, women, children, entire families. Lives, homes, jobs, savings, retirements. Security and hope. Gone.

Tourre is like a Komodo Dragon who delivers a toxic, lethal bite to its victim, then relentlessly tracks it for days till it finally dies...then feasts with abandon.

(My personal apologies to Komodo Dragons everywhere - no offense meant...just illustrating a point. You guys rock.)

[siasina]

12:00 PM on 04/20/2010

Fabulous Fab can share a jail cell with Bernie Madoff.

[Kerwood]

05:21 PM on 04/19/2010

Hey folks, I just don't get it...

Yes the corruption of Washington and Wall Street is complex and far reaching. That's what power does, in both circles. The thing that I wish would dawn on people is that Obama came into this mess as it was 99% laid, most of that during the Bush/Cheney era. It's up to him and his team to clean up and that's what he's trying to do. Yet because of the hardship that is prevalent today throughout America, so many voices are out to blame the evil Democrats for their hardships and their losses. Wake up, everyone. It's the GOP elephant that created this steaming pile of crap...don't blame the guy with the shovel for how bad it smells while he cleans it up.

[hellboundtrain]

07:51 AM on 04/17/2010

Follow the money!
The money provided by the banksters that bought congress, as well as rating agency cooperation.

[wafuu]

05:24 AM on 04/17/2010

Looking at this pile de merde that the U.S. received from France, maybe a few million illegals from Mexico isn't such a bad deal after all.

[lislbc]

12:33 PM on 04/17/2010

hmmmm. So then, that would make the Wall St. score something like..... France, 1 pile de merde; US, 3768 piles de merde? Methinks provenance is irrelevant and unrelated. Where ever they (or thier parents, or grandparents) came from, the entire Wall St. lot should be publicly hang/ed.

[spiritpony1]

08:49 PM on 04/21/2010

LOL---

[Lauteur Calme]

02:47 AM on 04/17/2010

As a distant observer, it is astonishing U.S. tax payers have been fooled into thinking the failure of AIG would have been catastophic by undermining confidence in the financial system. In essence, this veil of deception allowed a Coup d'etat of the U.S. Government and Treasury by the banking system elite to pay off GS.

It is undeniable that politicians in Washington D.C. have been bought and sold for years by financial lobbyists in favor of Wall Street's interests at the expense of U.S. tax payers for many generations to come.

A most glaring abdication of duty by U.S. politicians indeed! (i.e.,.Paulson, Richard Shelby, Chris Dodd, Barney Frank, Geitner, Bernake, and both the Clinton and Bush Administrations, etc...).

One must ask the question who was responsible for supervising and overseeing the behavior of AIG and Wall St. firms while U.S. politicians basically rolled the dice in providing subsidized housing (i.e., Fannie/Freddie via Clinton's State of the Union Address)?

From the U.S. tax payer viewpoint, the actions of U.S. politicians and Wall St. are totally indefensible and is the apotheosis of utter incompetence, greed, and arrogance!

The smell of this egregious behavior by Wall St. and the U.S. permeates from Shanghai to Dubai!

[Peter Noble 2]

09:57 AM on 04/17/2010

The American people, most natural born; voted in 2008 for a new honest government. Instead they saw the Oligarchs bribe the entire Democratic Party government and be offered even more of our tax money to use for even larger bonuses.

Most wages have stagnated except for those in the top 1%. The Oligarchs and the merely wealthy increased their wealth and income by staggering amounts. in the case of Goldman Sachs by historic amounts. Even the Obama's saw over a 100% increase to bring in 5 million for 2009.

That's a stunning increase when the majority of Americans face a future of grinding poverty. True Palin made more but Obama is President and by now surely under a Dem Congress his taxes should have been higher? Instead his first year was spent ensuring the wealth of the very few and the future profits of Wellpoint and the CEO's bonuses after 2014.

Now finally when another election is due, all of a sudden; Obama's "savvy" Goldman Sachs is under investigation by the SEC.

Goldman Sachs are thieves, even a lowly paid cleaner could have told Obama that; before he claimed we did not "begrudge" the CEO his wealth.

What bet if Financial Reform is not passed before November that Obama like he did on HCR backslides and allows the Banks to write the reform as Wellpoint did HCR?

The Republicans are despicable but the New Democrats are hypocrites. Either way we the people are in deep trouble.

[Ozarks]

09:49 PM on 04/16/2010

With that moniker "Fabulous Fab", Fabrice Tourre could always go into Pro Wrestling after he serves his time in jail.

[taquinas]

11:29 PM on 04/16/2010

Do unto him what he did to his investors. Don't think that will happen, but it should. A 20 year prison term reduced to 5 and you get to walk away with millions. Many 60 year olds will jump on that offer.

[david5000]

04:18 AM on 04/17/2010

Maybe he should have watched Michael Douglas movie and would have learned the consequences of your cro00ked actions, his young age is telling the whole story about the new generation of Michael Milken.

[VoteThemAllOut]

09:44 PM on 04/16/2010

I just have to wonder if this dude is the designated ‘scapegoat/sacrificial lamb’ selected to to divert public attention from the White House. Let’s see who might be a candidate that needs to be sheltered from scrutiny:

The case of Lawrence Summers, director of the National Economic Council and Obama’s top economic adviser, …Summers pocketed $5 million as a managing director of D.E. Shaw, … another $2.7 million for speeches delivered to Wall Street firms that have received government bailout money.
Michael Froman, deputy national security adviser for international economic affairs, worked for Citigroup and received more than $7.4 million from the bank from January of 2008 until he entered the Obama administration this year. Citigroup has thus far been the beneficiary of $45 billion in cash and over $300 billion in government guarantees of its bad debts.
Obama’s deputy national security adviser, Thomas E. Donilon, was paid $3.9 million by a Washington law firm whose major clients include Citigroup, Goldman Sachs and the private equity firm Apollo Management

Louis Caldera, director of the White House Military Office, made $227,155 last year from IndyMac Bancorp.
Source: http://www.globalresearch.ca/index.php?context=va&aid=13208

Treasury Secretary Timothy Geithner’s closest aides, include Gene Sperling, who last year took in $887,727 from Goldman Sachs and $158,000 for speeches mostly to financial companies, including the firm run by accused Ponzi scheme mastermind R. Allen Stanford.
Source: http://www.harpers.org/archive/2009/10/hbc-90005913

[SiddArthur]

10:02 PM on 04/16/2010

Ridiculous (adjective) 1. Nonsensical, absurd. 2. See Above.

[taquinas]

11:41 PM on 04/16/2010

6 Degrees of Separation.
Not the same as "Brownie, you're doing a heck of a job," (Bush-Katrina-FEMA debacle)

[shivasquest]

09:30 PM on 04/16/2010

Not so "FAB" now huh?

[HWBII]

09:29 PM on 04/16/2010

Words fail me.

But I'll give it a short go: Could such a monster, having created monstrous "derivatives" ever really know the misery he and his ilk brought upon the world.

I think he must have many, many years to contemplate this is a very small room with a stainless steel toilet and a very thin mattress.

And one hour a day, tops, in the yard to contemplate the sky.

Horror.

[JoeDoorman]

09:28 PM on 04/16/2010

....we give you the french scapegoat
GS probably bet there stock would go down
its all rigged
the SEC had to do something
charging them on a friday minimizes the damage
this will eventually take the heat off the guys in charge

on some business channel, while the anchor was reporting this story
on the bottom of the screen was typed.
“is it a good time to buy GS?”

this is what we are dealing with
there is no escape

[AverageCanadianGuy]

08:37 PM on 04/16/2010

Ah a Fabulous French genious seen it before everyone...and Goldman asked him to make profit for us .....