By Mark Penn
WASHINGTON (Politically Illustrated) – Fabrice Tourre denied Goldman Sachs involvement in creating and selling mortgage investments to defraud investors during the Senate Permanent Subcommittee today as the bank defends itself against fraud allegations from the Securities and Exchange Commission.
“Although I don’t recall the exact words that I used, I recall informing ACA that Paulson’s fund was expected to buy credit protection on some of the senior tranches of the AC-1 transaction,” said Mr. Tourre to the Senate Permanent Subcommittee. “This necessarily meant that Paulson was expected to take some short exposure in the deal”.
Mr. Tourre was one of Goldman Sachs top employees running the Abacus 2007-AC1, which The Securities and Exchange Commission believe defrauded investors.
“I deny – categorically – the S.E.C.’s allegation. And I will defend myself in court against this false claim,” said Mr. Tourre in a prepared statement.
Mr. Tourre said Goldman Sachs had no motive to design a deal to fail.
“There is something unseemly about Goldman betting against the housing market at the same time that it is selling to its clients mortgage-backed securities containing toxic loans. And it is unsettling to read emails of Goldman executives celebrating the collapse of the housing market when the reality for millions of Americans is lost homes and disappearing jobs,” said Sen. Carl Levin (D-MI).
Politically Illustrated
