On Thursday, Wall Street’s regulator, the Securities and Exchange Commission, won its first suit against an employee of a big American bank involved in bad mortgage deals sold to investors before the financial crash. Fabrice Tourre, a former trader at Goldman Sachs, was found liable on six of seven charges and faces a fine or a ban from Wall Street. Observers have criticized the pursuit of a midlevel employee rather than the bank’s executives. In 2010, the SEC charged Goldman with fraud, but settled for $550 million.
"A former Goldman Sachs trader at the center of a toxic mortgage deal lost a closely watched legal battle on Thursday, giving Wall Street’s top regulator its first significant courtroom victory in a case stemming from the financial crisis.
A federal jury found the trader, Fabrice Tourre, liable on six counts of civil securities fraud after a three-week trial in Lower Manhattan. The case had given both sides — the government and Mr. Tourre — a chance to repair their reputations.
For the Securities and Exchange Commission, a regulator dogged by its failure to thwart the crisis, the case offered a shot at redemption following one courtroom disappointment after another, including two similar mortgage-related cases that crumbled last year.
For Mr. Tourre, 34, who abandoned his trading career to pursue a doctorate in economics and become a teacher, the threat of being barred from Wall Street came second to the black mark on his name.
Five years after Wall Street risk-taking nearly toppled the economy, the S.E.C. has taken only a handful of employees to court in connection with the crisis; most cases have been settled. The agency has not leveled fraud charges against one top executive at a big bank.
“He was the one that didn’t get away,” one of the nine jurors, Beverly Rhett, said after the verdict. “The decision-making was a slow and arduous process,” said Ms. Rhett, a retired teacher who was juror No. 2. “We went over each item with a fine-tooth comb. We looked into the semantics and tried to understand them as best as we could.”'
"Redemption" for the S.E.C.? What a tragic comedy.
Let me reiterate, The case is civil, not criminal and Tourre faces possible fines and a ban from the industry, the BBC reports. He won't spend one single day in jail, let alone prison.