The Securities and Exchange Commission rested its case Monday against former Goldman Sachs (NYSE: GS) bond salesman Fabrice Tourre, and defense attorneys declined to call any witnesses.
Tourre, who was questioned last week by SEC lawyers during the prosecution’s case, will not take the stand in his own defense.
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The jury could begin deliberating on Tuesday after attorneys for both sides present closing arguments.
Tourre faces civil charges stemming from allegations he lied to investors about a complicated investment product called a collateralized debt obligation filled with shaky mortgage loans that Tourre allegedly believed would tumble in value.
Specifically, the SEC claims that in 2007 Tourre, then a 28-year-old vice president with Goldman, worked with hedge fund guru John Paulson to create an investment product called Abacus 2007 AC-1 loaded with mortgage-backed securities that both Tourre and Paulson expected to go bad.
Tourre allegedly lied to potential investors, claiming Paulson was betting that the value of Abacus would rise rather than fall when, in fact, Paulson had bet all along that Abacus would collapse in value as the U.S. housing market collapsed.
And that’s what happened: investors lost over $1 billion in the Abacus deal, according to the SEC. Paulson was not charged in the case.
Goldman settled the case with the SEC for a then-record $550 million.
During questioning last week, Tourre said he never meant to mislead anyone about Abacus.
Tourre became famous due to an e-mail he sent to a girlfriend that was obtained by the SEC. In the message, he called himself “Fabulous Fab” and predicted that products he created at Goldman would fail with the U.S. housing market.
Tourre told the jury the e-mail was meant as a romantic note to his girlfriend and not as a predictor of the economic crisis.