Wall street: natural habitat of scam artist Fabrice Tourre, who set up risky investments and bet on them to fail at Goldman Sachs. Photo from Flickr.
Who the heck is Fabrice Tourre? He’s the focus of a civil lawsuit brought by the Securities and Exchange Commission for fraud. As a Sr. Vice President at Goldman Sachs, Tourre allegedly created a bunch of mortgage backed securities he knew full well were risky, then set up insurance in the form of Credit Default Swaps (CDS) to make quick cash when they failed. Tourre talked scores of people into buying his securities, took them to the cleaners and walked away with the cash. What a guy.
Fabrice Tourre, AKA ‘Fabulous Fab’
Fabrice Tourre is a humble fellow who calls himself “The Fabulous Fab.” The Huffiington Post reporting on the SEC complaint said that Tourre, a Stanford graduate from France who has worked for Goldman Sachs on Wall Street for 10 years, was proud of his lowlife scheme for instant money. In an e-mail to a friend on January 23, 2007, the London-based trader called himself “The Fabulous Fab” and warned about the coming collapse in the sub prime mortgage securities market. In the message, he even admits to 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!!!”
Fabrice Tourre, Goldman Sachs fall guy
As to what will happen to Fabrice Tourre and Goldman Sachs, businessinsider.com points out that the SEC complaint is a civil lawsuit, not a criminal indictment. In that case, Goldman Sachs will likely have to write a check for a few hundred million dollars, but they won’t need a loan. Cable TV talking heads will chatter for a day or two, and then the issue will go away. Goldman Sachs has the resources to fight off the civil lawsuits filed by all the people who Tourre ripped off. Some will be settled. Some will be dismissed. Goldman Sachs will continue to make money hand over fist.
Fabrice Touree slithers away
As for dear Fabrice Tourre, he’s lucky the SEC complaint is a civil lawsuit. Otherwise he could end up as someone’s girlfriend in jail. Too bad. As is often the case with white collar criminals, he will pay a cash settlement to the SEC and get blackballed from the industry. After the scandal blows over, he will re-emerge in an institution that admires the sort of twisted ingenuity that brings down entire economies while raking in hundreds of millions. Is this a great country or what?
It is sickening. But even now as we continue to feel the effects of the market meltdown we become more complacent each day. The wealthy elite and those who serve them knew full-well that the bubble they were creating would burst and that the working americans would bare the brunt of the fallout. I don't think they knew how significant the "market correction" would be. Trading stocks and speculating on so-called commodities will never benefit the working class. Ironically, we have the power to effect change but we lack the will to make it happen.
It makes me sick that these people got away with scaming so many people. I hope they get convictions, and those convictions lead to changes that make sure this type of thing never happens again.
The SEC has to start paying very close attention to these shenanigans, and the bite against them has to have sharp teeth.
From what I hear you start off at the SEC at about 70k a year.Then if you play along with the likes of Gold In Sacs you get a job with them for about 700k a year.All these agencies that are suppose to be watching the public`s backs are bought off.No doubt many in government have been bought off too.
Great story, Bill. Before I read this I had seen a few reports on his actions and already my blood was boiling. Your story rounded out my perspective and I'm glad to see a young Bernie Madoff get caught early…..
While SEC is enjoying their porno websites………………….
Yes, it's fabulous to know just how our tax dollars are being spent. We should start a new holiday: a "Let's Be Accountable for Our Actions" Day. Let's do that on Sundays, Mondays, Tuesdays, Wednesdays, Thursdays, Fridays and Saturdays from now on.