The Securities and Exchange Commission has expanded its complaint against Goldman Sachs (NYSE: GS) trader Fabrice Tourre. The new allegations accuse Tourre of giving the company “substantial assistance” as it misled investors in a product linked to subprime mortgages.
Although the SEC reached a $550 million settlement with Goldman Sachs in July, the new claim against Tourre appeared in an amended complaint filed Nov. 22 at U.S. District Court in New York. The London-based trader, accused of helping the Wall Street firm defraud investors in a product known as Abacus, may face trial after failing to win dismissal of the SEC’s case.
Jacob Frenkel, a partner at Potomac, Maryland- based law firm Shulman Rogers Gandal Pordy & Ecker commented that “the SEC is clearly preparing for this case to go the distance. They want to make sure that their allegations are sufficiently broad” so that a jury could still find him responsible for aiding fraud even if they determine he wasn’t the primary violator, he said.
Tourre “played a principal role” in the offer and sale of the securities to Dusseldorf, Germany-based IKB Deutsche Industriebank AG, and “was aware” of marketing materials that omitted Paulson’s role in selecting underlying securities for Abacus, the SEC said.
