In what some are describing as a historic win for regulators, a federal jury today found Fabrice Tourre, a former Goldman Sachs vice president, liable for deceiving investors in a mortgage-linked deal that imploded during the financial crisis.

The U.S. Securities and Exchange Commission alleged that Tourre helped create a collateralized debt obligation (CDO) that would allow investors to place bets for and against a pool of mortgage bonds, so that hedge fund Paulson & Co. could place a short bet against the mortgages.

Tourre was accused of misleading the bond insurer picked to select the mortgage bonds, ACA Financial Guaranty Corp., into thinking that Paulson & Co. planned to take a long position in the CDO. Tourre was also accused of hiding Paulson & Co.’s role in engineering the CDO from investors who took long positions.

Paulson & Co. ultimately made $1 billion shorting the CDO, The Associated Press reported.

In 2010, Goldman Sachs settled SEC allegations over the deal for $550 million. The SEC offered Mr. Tourre a deal, too, but he rejected the offer, according to WSJ.

The SEC has come under fire for allegedly failing to adequately hold individuals accountable for their role in precipitating the housing collapse.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription