Former Goldman Sachs Group Inc. (GS:US) trader Fabrice Tourre’s request to exclude a scheme liability claim was opposed by the U.S. Securities and Exchange Commission in its lawsuit over collateralized debt obligations.
“This court should deny the defense motion to preclude evidence or argument concerning Tourre’s scheme to defraud and his transactions, practices and courses of business that operated as a fraud or deceit on others,” the SEC said in a filing today in federal court in Manhattan.
Tourre said in a May 30 motion that the SEC for three years has accused him of making misleading statements and omissions, not of participating in a scheme to defraud investors. The SEC only sought to press a scheme liability claim in court filings two months ago, Tourre said.
“This abrupt pivot to scheme liability is undoubtedly driven by the SEC’s well-founded concern that certain evidence it would like to introduce against Mr. Tourre is inadmissible under the misstatements theory that has been the basis of the SEC’s case for over three years,” according to Tourre’s May 30 filing.
The SEC initially sued the London-based trader in April 2010, saying he defrauded investors by not disclosing that hedge fund Paulson & Co. helped pick the underlying securities for a collateralized debt obligation called Abacus 2007-AC1 with the intention of betting against them.
After reaching a $550 million settlement with New York-based Goldman Sachs, the SEC filed a new claim against Tourre, saying he gave the company “substantial assistance” as it misled investors.
The case is scheduled for trial July 15.
Sean Coffey, Tourre’s lawyer, said he hadn’t seen the SEC’s filing yet and couldn’t comment on it.
The case is SEC v. Tourre, 10-03229, U.S. District Court, Southern District of New York (Manhattan).
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