By John Manley
Three years ago, Goldman Sachs bond trader Fabrice Tourre, emailed his girlfriend Marine. Amid the amour and tendresse, “Fabulous Fab” expressed his misgivings about his job: he was conflicted about selling financial instruments that he thought were destined to fail.
Though Fab tried to rationalise his role as a small cog helping the huge engine of the capital markets operate more efficiently, he didn’t appear entirely convinced that this cleared him of any ethical responsibility.
“Anyway, not feeling too guilty about this,” Fab wrote to Marine in January 2007. “The real purpose of my job is to make capital markets more efficient and ultimately provide the U.S. consumer with more efficient ways to leverage and finance himself, so there is a humble, noble and ethical reason for my job amazing how good I am in convincing myself !!!”
The SEC charges in a civil suit that Tourre and Goldman fraudulently marketed a synthetic CDO by hiding crucial information from investors, including the role that hedge fund Paulson & Co played in picking mortgage products tied to the CDO. Paulson & Co subsequently shorted the Abacus CDO.
Tourre is due to testify before a US Senate panel on Tuesday, along with Goldman Chief Executive Lloyd Blankfein and other former and current executives.