Wall Street's 'Fabulous Fab' heads to trial
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The trial of the infamous ex-Goldman Sachs trader Fabrice "Fabulous Fab" Tourre, which starts Monday, could put a face on the type of Wall Street recklessness that imploded the housing market and almost sank the economy five years ago.
"This is one of the few opportunities that a court has had to punish conduct associated with the financial crisis that put this country into a grave recession," said attorney David Marder. Marder is a former assistant director of the SEC's Boston office who now defends clients against SEC charges.
Ever since the economy took a nosedive in 2007, there's been a big public outcry blaming Wall Street and its shenanigans. There have been several penalties levied, notably a $550 million settlement that the Securities and Exchange Commission reached with Goldman Sachs (GS, Fortune 500) in 2010. But trials have been few and far between.
Tourre is accused of knowingly selling bad investments that he expected would unravel. When he goes to court, it will be the first such trial since the 2009 acquittal of two former Bear Stearns hedge fund managers, Matthew Tannin and Ralph Cioffi, who were also accused of misleading investors.
If Tourre is found liable, he could face a hefty fine from the SEC and be barred from working in the financial industry. "The SEC can take a real bite out of you," said Marder. "The sky's the limit in terms of the monetary penalties."
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