Fabrice Tourre and Goldman Sachs Accused of Civil Fraud

Fabrice Tourre and Goldman Sachs & Co Have Been Accused of Civil Fraud by SEC

The Securities and Exchange Commission (SEC) accused Goldman Sachs & Co of civil fraud on Friday as it claims the bank defrauded investors as it did not divulge the conflicts of interest in the subprime investments that it sold off before the massive housing collapse.

The SEC filed a civil complaint according to the Associated Press, saying that one of their clients created and then bet against the subprime mortgage security that Goldman then sold on to other investors. The two European banks that took advantage of this sale lost almost $1 billion and they want to recoup their profits.

Goldman Sachs have called the allegations 'completely unfounded'.

Fabrice Tourre has been charged as well as he is the one most responsible according to the SEC for making the deal happen. He is currently the executive director of the London office of Goldman Sachs.

He allegedly boasted to a friend of the deal and in an e-mail he stated:

Just last week Goldman Sachs denied allegations that they bet against their own clients by selling mortgage-backed securities to them while limiting their exposure.