SEC fraud case against ex-Goldman trader Tourre in homestretch

Mon Jul 29, 2013 3:25pm EDT
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By Nate Raymond and Katya Wachtel

NEW YORK (Reuters) - Testimony ended Monday in the civil fraud case of Fabrice Tourre, with lawyers for former Goldman Sachs trader not calling any witnesses before the U.S. Securities and Exchange Commission's case goes to a Manhattan federal jury.

Tourre's lawyers had been expected to call witnesses including hedge fund billionaire John Paulson to testify on his behalf.

Instead, his lawyers asked the presiding judge to take the case away from the jury and rule in Tourre's favor, which, as expected, she rejected.

"There is a lot of evidence the jury is entitled to weigh," U.S. District Judge Katherine Forrest said.

Closing arguments will begin on Tuesday morning, and Forrest said jury deliberations may begin on Wednesday.

The SEC accused Tourre of not disclosing to investors that Paulson's hedge fund firm, Paulson & Co Inc, selected mortgage securities tied to a 2007 deal called Abacus 2007-AC1 and planned to bet against it.

The SEC also said Tourre misled ACA Capital Holdings Inc, the company brought in to select assets linked to Abacus, into believing Paulson would be an equity investor in the $2 billion synthetic collateralized debt obligation offering.

Investors in Abacus lost about $1 billion, while Paulson made about that same amount betting against it.   Continued...

President and Portfolio Manager of Paulson & Co. John Paulson speaks during the Sohn Investment Conference in New York, May 16, 2012. REUTERS/Eduardo Munoz