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Ex-Goldman trader 'Fabulous Fab' loses fraud case

" Former Goldman Sachs trader Fabrice Tourre, the self-proclaimed "Fabulous Fab" who became a symbol of Wall Street's role in the financial crisis, was found liable for fraud today after a two-week trial in a Manhattan federal courtroom.

"The jury verdict came a little more than three years after securities regulators who brought the civil case announced a $550 million settlement with Goldman Sachs in its role in an investment deal Tourre put together.

"Tourre, 34, was found liable for defrauding European banks that in 2007 invested in mortgage-related securities whose value was based on a pool of mortgages selected by hedge fund giant John Paulson.

"Investors were not told that Paulson had selected the mortgages because he thought they would not be repaid and that the securities based on them would lose money, regulators charged in 2010. Paulson made $1 billion by betting against the security he and Goldman helped structure, the Securities and Exchange Commission charged.

"Some experts said the case showed the SEC can prosecute complex cases stemming from the financial crisis and win. But getting tough on a junior executive such as Tourre while letting Goldman settle for $550 million and not charging any more senior executives left investor advocates unimpressed.

"The SEC finally got the Al Capone of Wall Street,'' sneered Dennis Kelleher, a former SEC litigator who is president of Better Markets, a Washington non-profit that advocates for financial reform. "They should be embarrassed. It's worse than doing nothing. They are laughing in the executive suites of Wall Street.''

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