Former Goldman Sachs trader Fabrice Tourre failed Wednesday to dodge hefty civil fines for his role in a mortgage securities deal that the U.S. Securities and Exchange Commission alleged was a massive fraud. But a federal judge in Manhattan refused to enjoin Tourre from future securities violations, concluding that such “obey-the-law” injunctions are of dubious value and noting that the SEC apparently never enforced one against an investment banker.
A jury found Tourre liable in August 2013 for securities fraud and five related charges, siding with the SEC’s claims that the young banker defrauded investors in an ill-fated collateralized debt obligation by failing to disclose that the hedge fund Paulson & Co. was both selecting mortgage-backed securities for the CDO and planning to short them. Goldman settled parallel SEC claims for $550 million in July 2010.
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