Fabulous Fabio is fighting the SEC fraud charges:
Fabrice Tourre, the Goldman Sachs Group Inc. executive director sued by the Securities and Exchange Commission for fraud, disputed the claims and said he relied on his firm’s legal and compliance department.
…
The firm is cooperating in the SEC’s investigation of Tourre, 31, who remains an employee. He is on leave, with legal expenses being paid by New York-based Goldman Sachs.“The purported claims against Mr. Tourre and the allegations upon which they are based are improperly vague, ambiguous and confusing, and omit critical facts,” the filing said. “Mr. Tourre, a French citizen and engineer by training, reasonably relied on Goldman Sachs’ institutional process to ensure adequate legal review and disclosure of material information, and cannot be held liable for any alleged failings of that process.”In the filing, Tourre said he was aware that Paulson “was considering taking some or all of the short side” of the transaction. He added that the offering document for the CDO contained all relevant information for investors, including the complete portfolio of assets, the fact that no one was purchasing the equity portion of the deal and that a Goldman Sachs affiliate had a short interest and could transfer that interest.
“The portion of the offering document prepared by ACA and for which ACA assumed sole responsibility states that ACA will ‘select the Initial Reference Portfolio,’” the filing said.
…
Senator Tom Coburn, a Republican from Oklahoma who serves on the Permanent Subcommittee on Investigations, repeatedly questioned Tourre and other Goldman Sachs executives on why the firm decided to release Tourre’s e-mails, including some that seemed unrelated to the hearing.“If I worked for Goldman Sachs, I’d be real worried that somebody has made a decision, ‘he’s going to be a whipping boy, he’s the guy that’s getting hung out to dry,’” Coburn told Blankfein during the hearing.
So there’s nothing too surprising in all this, other than the fact that a politician made an intelligent comment in the final paragraph.
It is of interest that Goldman is continuing to pay Tourre’s legal expenses. It is quite common for regulators to claim that paying legal expenses for an employee constitutes lack of cooperation, therefore leaving the fall guy facing hundreds of government lawyers on the government payroll all by himself. Lucky for Tourre, that doesn’t yet appear to be the case in this instance.
I am glad that somebody (namely, Tourre) has finally brought to light the startling news that Goldman has a legal and a compliance department who were involved in the issue. Am I the only other person in the entire world who has wondered why, if Goldman-the-firm did such a Very Bad Thing, that only one single employee has been charged? Am I the only other person in the entire world who has noticed the total lack of SEC interest in going after all the people who signed off on the deal?
It’s a farce, a ridiculous farce, just another piece of regulatory extortion and political theatre. The fact that one guy who did a good job is at jeopardy of losing his reputation and entire career in the process doesn’t bother the apparatchiks at the SEC.
A day of mixed results on good volume for the Canadian preferred share market, with PerpetualDiscounts gaining 15bp and FixedResets down 7bp.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 2.82 % | 2.90 % | 23,574 | 20.27 | 1 | -0.2370 % | 2,078.1 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1439 % | 3,147.7 |
| Floater | 2.29 % | 1.97 % | 40,386 | 22.45 | 4 | 0.1439 % | 2,243.5 |
| OpRet | 4.87 % | -0.15 % | 102,744 | 0.09 | 11 | 0.2442 % | 2,345.2 |
| SplitShare | 6.28 % | 6.17 % | 77,870 | 3.42 | 2 | 0.2169 % | 2,209.3 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.2442 % | 2,144.4 |
| Perpetual-Premium | 5.91 % | 5.27 % | 107,805 | 1.82 | 4 | 0.3648 % | 1,940.3 |
| Perpetual-Discount | 5.84 % | 5.90 % | 189,056 | 14.03 | 73 | 0.1481 % | 1,852.4 |
| FixedReset | 5.32 % | 3.57 % | 337,483 | 3.46 | 47 | -0.0655 % | 2,219.8 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| POW.PR.D | Perpetual-Discount | -1.19 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-07-20 Maturity Price : 20.75 Evaluated at bid price : 20.75 Bid-YTW : 6.07 % |
| ENB.PR.A | Perpetual-Discount | 1.02 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-07-20 Maturity Price : 24.60 Evaluated at bid price : 24.85 Bid-YTW : 5.61 % |
| MFC.PR.C | Perpetual-Discount | 1.31 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-07-20 Maturity Price : 19.30 Evaluated at bid price : 19.30 Bid-YTW : 5.91 % |
| BAM.PR.I | OpRet | 1.36 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2010-08-19 Maturity Price : 25.50 Evaluated at bid price : 26.10 Bid-YTW : -18.45 % |
| HSB.PR.D | Perpetual-Discount | 1.64 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-07-20 Maturity Price : 21.65 Evaluated at bid price : 21.65 Bid-YTW : 5.84 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| IAG.PR.E | Perpetual-Discount | 98,341 | TD crossed 89,400 at 24.70. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-07-20 Maturity Price : 24.54 Evaluated at bid price : 24.75 Bid-YTW : 6.12 % |
| GWO.PR.J | FixedReset | 65,768 | Nesbitt bought 10,000 from RBC at 27.10 and 20,000 from anonymous at the same price. RBC crossed 20,300 at 27.18. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-01-30 Maturity Price : 25.00 Evaluated at bid price : 27.10 Bid-YTW : 3.57 % |
| TD.PR.A | FixedReset | 65,125 | RBC crossed blocks of 35,000 and 28,000, both at 26.20. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-02 Maturity Price : 25.00 Evaluated at bid price : 26.14 Bid-YTW : 3.57 % |
| PWF.PR.P | FixedReset | 64,750 | Recent new issue. YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2040-07-20 Maturity Price : 23.27 Evaluated at bid price : 25.45 Bid-YTW : 3.92 % |
| BNS.PR.P | FixedReset | 61,476 | Scotia crossed 53,500 at 26.10. YTW SCENARIO Maturity Type : Call Maturity Date : 2013-05-25 Maturity Price : 25.00 Evaluated at bid price : 26.15 Bid-YTW : 3.23 % |
| TD.PR.G | FixedReset | 60,814 | Nesbitt bought 30,000 from anonymous at 27.87. National crossed 25,000 at 27.60. YTW SCENARIO Maturity Type : Call Maturity Date : 2014-05-30 Maturity Price : 25.00 Evaluated at bid price : 27.60 Bid-YTW : 3.36 % |
| There were 47 other index-included issues trading in excess of 10,000 shares. | |||