Fabrice Tourre, the former Goldman Sachs trader whose emails bragged about creating financial instruments of sub-prime mortgages ("a product of pure intellectual masturbation"), was found liable for civil securities fraud. Bloomberg News reports, "The jury’s finding of wrongdoing may help Goldman Sachs customers in lawsuits against the bank over losses tied to the transaction. Tourre faces unspecified money penalties and a possible ban from the securities industry."

The Securities and Exchange Commission sued Goldman Sachs in 2010 for duping investors. The SEC said then, "Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party." While Goldman was going to initially fight the charges, the firm settled, paying $550 million.

Tourre, a vice president, was also named in the SEC's suit, because he helped design the system that was supposed to fail. In a 2007 email, Tourre wrote, "More and more leverage in the system. The whole building is about to collapse anytime now ... Only potential survivor, the fabulous Fab[rice Tourre] ... standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implication of those monstruosities [sic]!!!" Tourre has claimed that email was a "silly romantic email to my girlfriend, sent as I was very stressed that day." He was paid $1.7 million in 2007.

Though his defense claimed Tourre was a scapegoat for the vampire squid, SEC lawyers said he helped perpetuate a "Goldman Sachs land of make believe." From the NY Times:

Mr. Tourre, whose fresh face and diminutive stature suggest he is much younger than his current age of 34, took the witness stand for three crucial days. While he showed a sympathetic side as someone who has shunned Wall Street to pursue his Ph.D. and a teaching career, he also stumbled at times and even conceded that he made mistakes.

But his defense failed to persuade a jury that included a minister, a graphic designer and a former stockbroker. The broker routinely whipped his head back and forth between the lawyers and the witness stand, but other jurors appeared to nod off as the case became bogged down in financial minutiae.

In finding Mr. Tourre liable for civil fraud, the jury concluded that he made a material — or important — misstatement to investors and failed to correct it. The S.E.C. had to prove its case by a preponderance of the evidence, a lower standard than criminal cases.

Anthony Michael Sabino, a professor at St. John's University's Peter J. Tobin College of Business, said, "It’s fairly obvious why the jury not only found him liable, but did so most assuredly. They undoubtedly found his emails quite damaging, and Fab’s attempt to explain them away not credible. Likewise, his efforts to blame others were found lacking by the jury. After all, he was the one on the spot, and the jury simply did not believe his version of the events in question."