Goldman's 'fabulous' fall guy?

By David Ellis, staff writer


NEW YORK (CNNMoney.com) -- As Goldman Sachs mounts its defense against the fraud suit brought by the Securities and Exchange Commission, many questions still surround the employee that allegedly helped broker the now infamous deal.

Fabrice Tourre, the 31-year-old French trader who paired up hedge fund operator John Paulson and two bullish institutional investors on the U.S. housing market, was a topic of interest during two separate conference calls Goldman executives hosted with investors and reporters Tuesday.

Executives at the company were asked whether Tourre helped create similar securities, including those that Goldman asked AIG (AIG, Fortune 500) to insure against mortgage defaults before the credit markets collapsed.

Goldman executives were also questioned whether the firm had reviewed all of Tourre's other work at the company.

Greg Palm, Goldman's co-general counsel, offered few details about what kind of scrutiny Tourre has come under since the SEC first lodged its civil suit against the company last Friday. Palm said that the firm's overall mortgage dealings went under the microscope once the investigation was launched by the federal agency in August 2008.

According to the SEC's suit, Tourre wrote in a 2007 e-mail that "the whole building is about to collapse anytime now" and that the "only potential survivor" was "the fabulous Fab[rice Tourre] ... standing in the middle of all these complex, highly leveraged, exotic trades he created."

There has been already speculation that the company could be setting up Tourre as a potential fall guy for the scandal.

Since last Friday's announcement by the SEC, the London-based employee has been placed on paid leave indefinitely, according to a company spokesman.

The company also said it deregistered Tourre with the British regulatory agency Financial Services Authority. It was not immediately clear why Tourre was having his credentials removed, although other news reports suggested it was related to him taking leave from the company.

Goldman Sachs (GS, Fortune 500) reported profits of $3.5 billion Tuesday, beating analysts' estimates. Shares of the company however, fell over 1% in afternoon trading.

--CNN's Mythili Rao also contributed to this report To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 4:36am ET
Company Price Change % Change
Bank of America Corp... 16.15 0.00 0.00%
Facebook Inc 58.94 0.00 0.00%
General Electric Co 26.56 0.00 0.00%
Cisco Systems Inc 23.19 -0.02 -0.09%
Micron Technology In... 23.91 0.00 0.00%
Data as of Apr 17
Sponsors

Sections

Spencer has been a supporting member of the "Good Morning America" cast for the past three years. More

Obamacare sign ups hit 8 million, though final enrollment remains to be seen. More

Office for iPad move is a symbolic victory for Nadella's Microsoft, but the company is still weighed down by many of the same old issues. More

Schwinn, Trek and Cannondale are all iconic American bicycle brands. But none of them are made in the United States. More

As Detroit moves closer to reaching a bankruptcy deal, retired civilian workers are poised to be left worse off than firemen and police officers. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.