Goldman Sachs Should Stand in the Jury Box

If Tourre has "violated a law designed to prevent fraudulent sales of securities," then shouldn't Goldman Sachs also be found guilty for allowing employees to commit such actions? Notice how convoluted the phrase is; rather than the judge saying he committed fraud he just "violated a law." Is that why so much of justice seems to be circumvented in these days after the financial crisis? I think Goldman Sachs should stand trial--with a jury of the 99%!

SEC Seeks Testimony of Ex-IKB Employee in Lawsuit Against Goldman's Tourre
By David Glovin - Bloomberg

The U.S. Securities and Exchange Commission wants to question a former employee of IKB Deutsche Industriebank AG (IKB) in its lawsuit against Goldman Sachs Group Inc. (GS) trader Fabrice Tourre, court records show.

The SEC today asked a federal judge in New York to issue a so-called letter of request that would allow the agency to take testimony from Jorg Zimmerman, a resident of Germany.

The agency sued Tourre in 2010, saying he defrauded investors by not disclosing that hedge fund Paulson & Co. helped pick the underlying securities for a collateralized debt obligation, known as Abacus, and planned to bet against them.

After reaching a $550 million settlement with New York- based Goldman Sachs, the SEC filed a new claim against Tourre, saying he gave the company “substantial assistance” as it misled investors. The SEC said IKB wouldn’t have invested if it had known of Paulson’s involvement in the portfolio selection.

“Tourre personally spoke with IKB employee Jorg Zimmerman to solicit interest in ABACUS 2007-ACI securities,” the SEC said in its filing.

The agency said its lawyers want to ask Zimmerman about IKB’s decision to invest, the representations that Tourre and Goldman Sachs made to the bank, “and the importance of the facts omitted by Tourre” and Goldman Sachs.

Jersey Firms

Zimmerman isn’t a defendant in the case. Tourre has denied wrongdoing in the lawsuit.

Pamela Rogers Chepiga, a lawyer for Tourre, said in an interview that today’s request is a corrected version of an SEC filing from several weeks ago, and that she has also asked the German court to order testimony.

Tourre has said in court that the $150 million investment was actually made by two Jersey-based firms in the Channel Islands, and not by Dusseldorf, Germany-based IKB.

“We have to finish up discovery in Germany,” Chepiga said. Discovery is the gathering and sharing of evidence before a trial.

U.S. District Judge Barbara Jones in Manhattan last year refused to dismiss the case while narrowing some of the claims against Tourre. She said the SEC had met its burden for pursuing a claim that Tourre violated a law designed to prevent fraudulent sales of securities and should stand trial.

The case is SEC v. Tourre, 10-cv-03229, U.S. District Court, Southern District of New York (Manhattan).

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