The Securities and Exchange Commission is throwing all but the kitchen sink on Fabrice Tourre, a junior salesman of Goldman Sachs, but why?
Three years ago, Goldman Sachs already settled the charges against it following the CDO fiasco to a tune of US $550 million. So why is the SEC still insist on proceeding with the civil case and spending hundreds and thousands of dollars in turn?
In a commentary published by Reuters' Felix Salmon, he argued that it means SEC is trying to make an example of Tourre to give the impression that it's not entirely without teeth.
If all goes according to plan, Tourre would be out of the securities industry and maybe even go bankrupt.
However, he said this strategy could backfire and embarrass the SEC even further because of the flimsy evidence against Tourre. It's also very difficult to argue on the illegality of what Goldman and Sachs did - immoral, yes - but not illegal.
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