WASHINGTON (Reuters) – The U.S. International Trade Commission said on Thursday it would delay a decision on whether some mobile phones and tablets made by Samsung Electronics Co Ltd infringe on Apple Inc’s patents.
NEW YORK — A former Goldman Sachs trader who earned the nickname “Fabulous Fab” was found liable Thursday in a fraud case brought by federal regulators in response to the 2007 mortgage crisis that helped push the country into recession.
A jury reached the verdict at the civil trial in Manhattan federal court of Fabrice Tourre — a French-born Stanford graduate described by Securities and Exchange Commission lawyers as the face of “Wall Street greed.” Tourre’s attorneys portrayed him as a scapegoat in a downturn caused by larger economic forces.
Tourre, 34, was found liable in six of seven SEC fraud claims. He faces potential fines and a possible ban from the financial industry. The exact punishment will be determined at a future proceeding.
The SEC had accused Tourre of misleading institutional investors about subprime mortgage securities that he knew were doomed to fail, setting the stage for a valued Goldman hedge fund client, Paulson & Co. Inc., to secretly bet against the investment.
The manoeuvre ended up making US$1 billion for the hedge fund and its wealthy president, John A. Paulson, and millions of dollars in fees for Goldman. The SEC also sought to show that it helped earn Tourre a bonus that boosted his salary to US$1.7 million in 2007.
On the witness stand, the SEC lawyers confronted Tourre with a January 2007 email it said deliberately misled another institutional investor about Paulson’s short position in the investment called Abacus 2007-AC1.
Asked repeatedly if the information in the email was “false,” Tourre responded, “It was not accurate.”
He added: “I wasn’t trying to confuse anybody; it just wasn’t accurate at the time.”
Leaving the courtroom on Thursday, SEC lawyer Matthew Martens said, “We’re obviously gratified by the jury’s verdict and appreciate their hard work.”
Tourre left the courthouse without speaking to reporters. His attorney also had no immediate comment.
In closing arguments, Martens called Tourre’s testimony “surreal, imaginary, unreal, dream-like” and told jurors that the defendant wanted them “to live in his imaginary land … to live in a fantasy world.”
“Only if you close your eyes to the facts, you can find Mr. Tourre not liable for his actions,” the SEC lawyer said.
Tourre’s attorney, John Coffey, countered that the government had “unjustly accused him of wrongdoing.”
Coffey urged jurors to put the investment’s failure in perspective, noting that all similarly packaged securities “went off the cliff as well” after 2007.
The civil case had been called the most significant legal action related to the mortgage securities meltdown, but it lacked the drama and high stakes of white-collar criminal cases. Much of the testimony was devoted to the intricacies of synthetic collateralized debt obligations, or CDOs — a complex type of investment central to the case.
Some of the testimony focused on a personal email Tourre sent to his girlfriend in France. The SEC lawyers said the missive proved the hubris of a man at the centre of a massive fraud, while the defence claimed was “an old-fashioned love letter” penned by a young trader who was full of self-doubt and angst over upheaval in the financial world.
Writing in French, Tourre said of the financial markets: “The whole building is about to collapse anytime now.”
“Only potential survivor, the fabulous Fab … Standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!”
Pressed by Marten on what he meant, Tourre said, “I didn’t create any monstrosities.”
Goldman settled with the SEC in 2010 by paying a US$550 million fine without admitting or denying wrongdoing. Tourre left the firm in 2012.
The Associated Press
Canada’s oldest incorporated city will likely emerge the big winner in the wake of TransCanada Corp.’s decision to build a $12-billion pipeline to transport crude oil from Alberta to refineries and export terminals in Quebec and New Brunswick.
The 228-year-old city of Saint John, nestled along the north shore of the Bay of Fundy, clings stubbornly to its historic Maritime past of shipbuilding. Home to North America’s first deep-water oil terminal, the city named after the Biblical figure John the Baptist, currently boasts Canada’s largest shipyard and one of the biggest dry docks on the planet, but it has seen far more traffic from cruise ship visitors than the industrial kind in recent decades.
That moribund existence will get a much-needed jolt if TransCanada secures the necessary regulatory and environmental approvals to forge ahead with building its Energy East pipeline that would deliver 1.1-million barrels of crude a day from Western Canada to the East, passing through Montreal, Quebec City and Saint John. Under the plan, TransCanada would convert about 3,000 kilometres of existing natural gas pipeline in Ontario and Quebec and construct an additional 1,400 kilometres extending to an ice-free, deep-water port in Saint John owned by Irving Oil Corp. Built in the 1950s, the TransCanada natural-gas pipeline is currently operating at only half capacity.
“I think there’s going to be winners all along the path [of the pipeline],” Peter Browning, president and chief executive of Irving Oil told the Financial Post in an interview Thursday. “Still, it’s great to be here [in Saint John].”
Touted as a nation-building exercise by both New Brunswick Premier David Alward and Alberta Premier Alison Redford, the project has been enthusiastically endorsed by Ottawa in recent months. Even Quebec has given its blessing, although Premier Pauline Marois indicated her province would study the proposal more in depth once TransCanada delivers more detailed plans in the coming weeks.
New Brunswick’s Mr. Alward has clung to the prospect of a West-East pipeline as vital for his province’s economic future. Consider how the creation of thousands of construction jobs – many of them highly skilled – slated to begin in early 2016 can improve the fortunes of an economically depressed province with a paltry economic growth of 0.7% and collapsing revenues. TransCanada’s Energy East pipeline and its potential $5-billion in investments alone for New Brunswick is a once-in-a-generation economic lifeline. “As New Brunswickers, we are all working for the day that our sons and daughters can go to work in the morning and be home for dinner that night, not three of four weeks later,” Mr. Alward said Thursday.
That the proposed pipeline will extend out to Saint John was far from a sure thing. In fact, when TransCanada put the call out to bidders in June, it sought long-term commitments for 850,000 barrels a day, but wound up with demand exceeding 1 million barrels a day from western producers desperate to diversify their markets outside of the United States. “I don’t think anybody expected that,” said Irving’s Mr. Browning.
Proponents of the Energy East pipeline see it as a win-win proposition for the country. Oil in Alberta is landlocked, which is why it fetches about $40 less a barrel in world markets. Meanwhile, the Atlantic provinces import foreign oil and pay a king’s ransom at the pumps – about 20% more – than the rest of the country. So why not get that stranded commodity in the West into a pipeline that stretches to the East, add Canadian value by refining it in Saint John, use that tide-water port to open up untrodden export markets and give an economically depressed region a crack at the spinoff activity?
To be sure, this exercise is more likely about opening up foreign markets for Western Canadian crude than it is about getting cheaper oil to the Maritimes. But the benefits are more widespread. Consider that TransCanada and Irving Oil announced Thursday that they will form a joint venture to develop and build a $300-million Canaport Energy East Marine Terminal adjacent to Irving’s existing import terminal in Saint John. That alone is estimated to create hundreds of employment opportunities and will employ 50 people in permanent, high-skilled jobs.
Also consider that a whole new line of business has opened up for Irving Oil, the pervasive corporate behemoth in the province. Irving currently exports finished petroleum products but the Energy East pipeline launches the company into crude oil exports. Inevitably there will be pressure to expand the existing refinery because it can process 300,000 barrels of oil a day.
Even with the new marine terminal, Irving won’t be able to accommodate the estimated 1.1 million barrels a day. And since Irving’s corporate fortunes are inextricably tied to those of the province, that should translate into more jobs – and more folks from New Brunswick working in the energy sector back home for dinner every night.