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SEC fails to revive fraud claim against Goldman's Tourre

Nov 20 2012 Jonathan Stempel, Reuters

The U.S. Securities and Exchange Commission cannot revive a securities fraud claim against Goldman Sachs Group Inc bond trader Fabrice Tourre over the sale of complex securities linked to subprime mortgages, a federal judge ruled on Monday. U.S. District Judge Katherine Forrest in Manhattan, who took over the case from her colleague Barbara Jones last month, rejected the SEC's argument that a recent court decision made a $150 million note sale to Germany's IKB Deutsche Industriebank AG IBKG.F sufficiently "domestic" to give her jurisdiction. Monday's decision does not affect the rest of the SEC's lawsuit against Tourre, which arose from charges filed against him and Goldman in April 2010. The SEC had accused them of defrauding investors in the Abacus 2007-AC1 collateralized debt obligation by not revealing that a hedge fund run by billionaire John Paulson had helped choose and then bet against the underlying securities. Goldman later settled for $550 million without admitting

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