In the SEC's highest-profile trial stemming from
its investigations into causes of the 2008 financial crisis, a
federal jury found Tourre liable in August on six of seven civil
charges he faced over the deal, which the SEC said cost
investors $1 billion in losses.
In its lawsuit, the agency said Tourre — who referred to himself
as "the fabulous Fab" in an email describing his activities — misled investors by failing to disclose that hedge fund
billionaire John Paulson helped choose, and intended to bet
against, mortgage securities underlying the deal.
"These lies mattered," lawyers for the agency told U.S. District
Judge Katherine Forrest in the document.
Paulson & Co made about $1 billion from his short position on
the deal, while investors including ACA Capital Holdings Inc and
IKB Deutsche Industriebank AG lost about the same amount, the
"It is critical that Tourre's conduct be addressed through
significant disgorgement and penalties, to ensure that he is
punished for his wrongdoing and that he and others are deterred
from engaging in such conduct in the future," lawyers for the
agency said in the document.
The agency asked that Tourre pay a civil monetary penalty of
$910,000. It also asked that he pay $175,463 in ill-gotten
gains, plus interest of $62,858.03, according to the document.
The SEC also said Tourre should be prohibited from accepting
reimbursement for the penalty from Goldman.
A spokesman for Tourre declined to comment and a spokesman for
Goldman Sachs did not immediately return a request for comment.
The case is SEC v. Tourre, U.S. District Court, Southern
District of New York, No. 10-03229.
(Editing by Stephen Coates)
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