Goldman Sachs' settlement with the SEC (SEC news) essentially obviated the deadline by which it was to reply formally to the fraud charges (fraud news). But for Fabulous Fabrice Tourre, the deadline held. He was not a party to the settlement, and he was thus required to respond. Which he did, noting that the SEC had failed to show a material omission of information in the marketing materials, according to the New York Times. He also said the commission had used pieces of evidence that were "improperly vague, ambiguous and confusing, and omit critical facts."

It will be interesting to see how this unfolds. Goldman Sachs (NYSE: GS) clearly would not be served well if this went to trial. Who knows which executives would be called to testify, and what testimony might embolden potential litigants. "The outcome of the case against Mr. Tourre could cast the Goldman settlement in a different light. If he pays a big fine in a settlement or loses the case, it could be viewed as confirmation that there was wrongdoing. If he wins in court, some Goldman shareholders may wonder why the bank paid a big fine in the case. Either way, a drawn out trial would keep the company's actions in the spotlight."

Would Goldman ever throw him under the bus? A rift could well develop, if it hasn't already. It's possible that the SEC wanted a specific agreement or admission from Tourre as part of the settlement, one that he could not agree with. This could get interesting.

For more:
- here's the article

Related Articles:
Goldman Sachs' Fabrice "Fab" Tourre: Hero or villain?
Scorecard: Lloyd Blankfein and Fabrice Tourre
Goldman Sachs releases more emails from Fabrice Tourre
Goldman Sachs' Fabrice Tourre at center of scandal