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The not-so-fabulous Fabrice Tourre

He’s young, French and the villain of the subprime meltdown


 

ABACA USA/Keystone Press

He is a made-to-order villain for these troubled times. A rich, young Wall Street banker, who—wait for it—also happens to be French. The author of boastful emails that joked about becoming “the only potential survivor” of the coming economic collapse, and selling concocted “Frankenstein” products to widows and orphans. Better still, Fabrice Tourre, the 31-year-old Goldman Sachs executive who is being sued by the U.S. Securities and Exchange Commission for his immodest part in the subprime mortgage meltdown, comes complete with a risible nickname: “Fabulous Fab.” Triple-word-score bonus points: he gave it to himself.

Tourre’s stammering performance before a U.S. Senate committee last week cemented his status as a focal point for hazy public anger about the type of calculation and greed that helped propel world markets off a cliff in 2008. The complex collateralized debt obligation (CDO) deal he pulled together with the not-exactly-disclosed aid of a New York short-seller cost an oblivious German bank US$1 billion. Goldman claims to have lost US$83 million on the transaction, although there seems to be considerable evidence that it too was hedging its bets. And for Tourre, failure had its own rewards—$2 million in salary and bonus and a promotion to the London office. (He is currently on paid leave.) A curious set of circumstances indeed.

The Frenchman made a stab at contrition: “I take full responsibility for my actions. I am saddened and humbled by what happened to the [housing] market,” he told the Senate. But under questioning, it became clear he mostly feels sorry for himself. “The last week has been challenging for me and my family, as I have been the target of unfounded attacks on my character and motives.”

And he might have a point. Despite rumblings of a criminal investigation, Tourre remains, to date, the only individual targeted by the SEC in connection with what appears to have been a system-wide shell game. (In another email disclosed by the regulators, a former Goldman executive described a different mortgage-backed security as “one s–tty deal.” Although such candour was for internal consumption only, the firm made it a priority to push said crap on its customers.) So how does it figure that a then-28-year-old junior executive will take the rap?

“To me he just seems like well-dressed Eurotrash,” marvels one Toronto financier, a long-serving veteran of the New York and U.K. markets, “the flotsam and jetsam that wanders through Manhattan between assignments back home.” The bars around London’s South Kensington tube station fill with “Fabulous Fab” clones each evening, he says, none of whom will ever be confused with the true masters of the fiscal universe.

Tourre’s profile is certainly more plodder than wunderkind. A product of two prestigious Paris prep schools, he went on to earn a bachelor’s in mathematics at the eggheady École Centrale. Fellow students remember him as serious and dedicated—rarely engaging in social activities. A huge soccer fan, Tourre was president of Centrale F.C., and is thought to have appropriated his nickname from Fabulous Fabien Barthez, the former goalkeeper for the French national team.

After completing a master’s at California’s Stanford University, he went to work for Goldman Sachs in 2001. Neighbours in New York, where he lived in a $4,000-a-month one-bedroom, say he occasionally threw nice parties with good liquor. When he transferred to London in 2008, joining his girlfriend, also a Goldman employee, he tried to negotiate a 20 per cent rent reduction on a flat, citing plunging worldwide real estate values. Clearly not grasping that irony, his landlord told the London Times that there was nothing remarkable about Fab. “He was always very polite and a bit of your average square corporate guy to me. I think he went jogging.” The French press reports that Tourre used his sizable 2007 failure bonus to buy his parents a house. Profitez-en!

The emails, or at least those selectively released by the SEC, suggest he is no stranger to vanity. But they do seem to fall well short of evil-genius territory. In fact, Tourre’s references to his work are mostly self-pitying complaints about being stuck late at the office, in a backwater corner of the Goldman Sachs empire. “The job is still pretty painful . . . A little bit like a recurring bad dream,” he writes to a former girlfriend in Paris. Tourre wasn’t even the short-seller’s first choice: the deal was reportedly shopped to another young investment banker, who thought it didn’t pass the sniff test. “Fabulous Fab . . . standing in the middle of all these complex, highly levered, exotic trades he created without necessarily understanding all the implications of those monstruosties [sic]!!!” says one of his jokey emails.

Poor Fabrice, smart enough to make it rain, but not clever enough to stay dry.


 

The not-so-fabulous Fabrice Tourre

  1. Mr Gatehouse, remember "Comfort the afflicted and afflict the powerful"?
    Think about it…

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