3. Goldman and the Fabulous Fab
We here at The Five Dumbest Lab have just one thing to say about the trader at the heart of this fraud case: Vive le Fabuleux Fab!
Central to the government's case against Goldman — and presumably the investment bank's defense — are the actions of Fabrice Tourre, the 31-year-old French trader who paired up hedge fund honcho John Paulson and two bullish institutional investors on the U.S. housing market. The SEC alleges that Tourre "misled ACA into believing that Paulson invested approximately $200 million in the equity of ABACUS 2007-AC1 (a long position)."
Since last Friday's announcement by the SEC, the London-based employee, who makes more than $2 million a year, has been placed on paid leave and deregistered with the British regulatory agency Financial Services Authority. Just because Tourre has been sidelined, however, does not mean he is out of the picture. In fact, his legend is growing.
London's Daily Mail
calls Tourre a "high flier" who moved to London in 2008 after spending several years in Goldman's New York office, where "he rented a £3,000-a-month ($4,600) apartment and claimed to be from a prominent French family." The Daily Mail goes on to say that the hard-partying Tourre was unafraid to wake the neighbors, and not just on Bastille Day.
As for Tourre's fateful nickname, he hung the moniker on himself. In a 2007 email, Tourre ill-advisedly wrote that "the whole building is about to collapse anytime now" and that the "only potential survivor" was "the fabulous Fabrice Tourre ... standing in the middle of all these complex, highly leveraged, exotic trades he created."
Au contraire mon Fab frere. You may still be standing, but it's in the middle of a tempete de merde of your own creation. And if you aren't careful, your bosses at Goldman may throw you en dessous de l'autobus.
Dumb-o-meter score: 85 — If infamy loves company, then Jerome Kurviel, the French rogue trader who sank Société Général, must be happy right now.