July 11, 2013 / 12:32 AM / 5 years ago

'Fabulous Fab' email admissible at former Goldman exec's trial

NEW YORK (Reuters) - The email that gave former Goldman Sachs Group Inc (GS.N) vice president Fabrice Tourre his “fabulous Fab” nickname can be introduced at his upcoming securities fraud trial, a federal judge tentatively ruled on Wednesday.

Fabrice Tourre, Executive Director, Structured Products Group Trading for Goldman Sachs, listens before testifying at the Senate Homeland Security and Governmental Affairs Investigations Subcommittee hearing on "Wall Street and the Financial Crisis: The Role of Investment Banks" on Capitol Hill in Washington April 27, 2010. REUTERS/Jim Young

U.S. District Judge Katherine Forrest in Manhattan overruled an objection from Tourre’s lawyers that the email, which was a personal note sent to his girlfriend, was irrelevant to the case. In a written order, Forrest said the ruling was preliminary and could still change in the future.

The U.S. Securities and Exchange Commission has charged Tourre with misleading investors about a 2007 mortgage securities investment called Abacus 2007-AC1 that regulators said was designed to fail. The agency contends Tourre failed to disclose that the hedge fund run by billionaire John Paulson helped select the mortgages underlying the Abacus investment and then bet on it to fail.

Goldman paid $550 million to settle the allegations but did not admit or deny any wrongdoing. Tourre, who denies any wrongdoing, is scheduled to go on trial on Monday.

Tourre sent the email on January 23, 2007, to his girlfriend at the time, Marine Serres, a Goldman Sachs co-worker stationed in London.

“The whole building is about to collapse anytime now,” he wrote in French, referring to financial markets. “Only potential survivor, the fabulous Fab ... Standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities!!!”

Media outlets quickly pounced on the nickname after the email became public.

Tourre’s lawyers argued on Tuesday that Serres played no role in the creation of Abacus 2007-AC1. The SEC countered that the email demonstrated Tourre’s state of mind regarding the investment.

A spokesman for Tourre declined to comment on Forrest’s ruling on Wednesday.

The case is SEC v. Tourre, U.S. District Court, Southern District of New York, No. 10-03229.

Reporting by Joseph Ax and Nate Raymond; Editing by Stephen Coates

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