Judge Refuses to Dismiss SEC Case Against Goldman's Fabrice Tourre

A federal judge refused a request by Fabrice Tourre of Goldman Sachs (GS) to dismiss an SEC fraud lawsuit, months after Goldman settled its part in the case for $550 million.

The lawsuit accused Goldman of creating collateralized debt obligations (CDO) and selling it to German investors without telling them that the hedge fund Paulson & Co helped choose the underlying securities so it could bet against them.

Tourre is the only individual who was sued.

U.S. District Judge Barbara Jones also allowed a motion by the SEC to file an amended complaint that takes into account a June decision by the Supreme Court, Reuters reported.

The Supreme Court ruled in Morrison v National Australia Bank that Australian shareholders who bought that bank's stock overseas could not raise securities fraud claims n the U.S. courts.

Tourre has said that the ruling warrants the dismissal of the SEC lawsuit against him. Tourre argued that the case had no merit because the CDOs were not listed on an exchange and the only investor was Germany's IKB Deutsche Industriebank, which invested overseas.

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Does anyone go to jail for this ??

November 02 2010 at 8:08 AM Report abuse +2 rate up rate down Reply