Fabrice Tourre, née "Fabulous Fab," was among the first round of witnesses, and he was repeatedly pressed about how he represented hedge fund trader John Paulson, who was the short on the deal, in question to the other investors involved. Tourre is the only person named as part the
Securities and Exchange Commission's
civil fraud charges against Goldman, which is accused of improper disclosure in relation to a synthetic CDO consisting of subprime mortgage securities.
Appearances by Michael Swenson, a managing director in structured products trading, as well as Joshua Birnbaum, who had the same title before resigning, and Daniel Sparks, who headed Goldman's mortgages division before leaving the firm two years ago, have already taken place. CFO David Viniar and Chief Risk Officer Craig Broderick were on the hot seat just after the market's closing bell rang, and CEO Lloyd Blankfein is still to come.
>>>Lloyd Blankfein Testimony
Much of the action so far has consisted of various Senators attempting to pin down Goldman executives about how much the company benefited from short positions on the housing market. Goldman
it lost $1.7 billion on residential mortgage-related products in fiscal 2008, while
(D., Mich.) says the company made more than $3 billion by going short. The party line from Goldman executives has been that they were simply acting as market markers and
While there have been a number of awkward moments (see Levin's exchanges about the so-called 'sh***y' deals with Sparks), investors seemed to think the Goldman contingent was holding its own as the stock was among the few financials to advance in Tuesday's weak session.
The shares rose a little less than 1%, even as the
Dow Jones Industrial Average
fell more than 200 points
to finish back under 11,000 for the first time since April 9. The
KBW Bank index
lost more than 3%. Goldman's stock is still down roughly 17% since the SEC's charges were announced.
-- Written by Lauren Tara LaCapra in New York