Fabrice Tourre wants the SEC to drop its charges against him.(The SEC’s charges against Fabrice remain because last Thursday, when the SEC announced that Goldman would settle the charges for $550 million, they also announced that the charges against Fabrice would not be dropped and the investigation would continue.)
This could well be a big fight. If the charges against Fabrice are dropped, it will rub a lot of the luster off the SEC’s Goldman trophy settlement they got last week.
That’s one reason for Fabrice to file for a dismissal.
Here are two more:
A fraud charge would be permanently damaging to his career. Goldman’s reputation has long been well-intact, Fabrice is not well known in the finance world yet and a fraud charge or settlement would seal the public’s (and anyone he doesn’t already know in the business community’s) first impression of him.
Second reason, he has a damn good case.
In his filing, he asks the SEC (politely) to re-read the “complete” and “accurate” documents a number of times:
“respectfully refers the court to the [offering materials, documents] for a complete and accurate statement of their contents.”
“Try again. Re-read the documents.” – That’s a strong rebuttal.
Also, he reminds the SEC that they have to use the full emails in court, not just the portions they want to.”
“denies that the allegations completely and accurately relfect the contents of partially-quoted emails.”
This is totally true – the SEC’s snippets of Fabrice’s emails do a horrible job of reflecting the true meaning of the message.
The SEC released this section of The Fabulous Fab Email to the public at first:
The SEC (or their lawyers, or whoever) completely changed the meaning of Tourre’s email. Let’s compare.
“More and more leverage in the system…” (This is Tourre’s interpretation of an FT article, which is about there being more leverage in the system. Tourre was referring to Gillian Tett’s article, “The unease bubbling in today’s brave new financial world,” which he attached in the email and recommended that his girlfriend read it. Here’s the article on Roubini’s blog.)
“The only potential survivor, the Fabulous Fab…” (after which, Tourre writes, “as Mitch would kindly call me, even though there is nothing fabulous about me, just kindness, altruism and” – we’ll cut the mushy stuff.)
Seriously, SEC? Tourre’s email is wildly different from how the SEC first portrayed it.
Anyway, Fabrice filed with the SEC yesterday a note that says he “denies that he made any materially misleading statements or omissions or otherwise engaged in any actionable or wrongful conduct.”
If the SEC fights, this could get interesting.