Not that I’m about to read or even begin to fathom who did what to whom in the SEC vs. Goldman Sachs brouhaha, but at the utterly, read one article and be done with it level, it sure is interesting.
It would certainly come as no surprise to find that the Masters of the Universe at Goldman were laughing all the way to a solvent bank, after unloading risky, poorly understood financial instruments onto investor naifs. There will be finger pointing and boo-hooing galore, and it will come as no further surprise if it all comes down to slightly cannier greed-heads taking slight advantage of slightly less canny greed-heads who just wanted to get in on the big score.
With the SEC news last week, Goldman shares took a mega-hit, but this, too, will no doubt pass.
Goldman will pay off some of the aggrieved, if only to keep their “good” name and their business. They’ll pay a (nominal) fine. The SEC will huff and puff that they’ve at long last done something. Then the cavalier, fast and loose deal makers will lay low for a nano-second or two. (Hey, there’s still money to be made…) The SEC will walk off with a modest saber rattle or two, and perhaps even – oh, no, Mr. Bill – a bit of regulation will be enacted.
But, come on, someone’s going to have to take a big old Goldman fall for this.
The perfect fall-guy, of course, is Fabrice Tourre a 31-year old “star” Goldman trader:
The SEC said Mr. Tourre was "principally responsible" for piecing together the bonds and touting them to investors. According to the SEC, Mr. Tourre wrote in an email shortly before the bonds were sold that "the whole building is about to collapse anytime now." He described himself in the email as the "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 monstruosities!!!" (Source: WSJ. Access to this article may require subscription.)
Perhaps not a smoking gun, but a smoking water pistol.
The charges against Tourre are civil, not criminal, but it’s likely that Tourre will pay a pink slip penalty. No way – unless he can name big names and drag some Goldman execs down with him – does Goldman not let him go. (“Shocked, I’m shocked that there’s gambling going on here.”)
So the fabulous Fab, alas, is not really the “only potential survivor.” He may, in fact, be the only potential fall-guy.
And what a fall-guy he makes.
First, there’s that name, so close to that of Febreeze, the air freshener. With shades of Fabio hovering over it, as well.
And then there’s the fact that he’s French. How delicious. Wouldn’t it be great if we could pin the entire debacle on one guy who happens to be a foreigner? Typhoid Fabrice. It’s all his fault.
Then there’s the silly e-mail…
Folks will be parsing this one out for a while. That is, after they go through their own e-mail files to clear out incriminating messages, forgetting for a minute that IT has been continually, possibly even continuously, backing up and storing every last “wazzup?” IM and ‘Honey, I’ll be home late. Gotta work.’ e-mails. (You know, the ones that really mean ‘I’m heading out to a cigar bar with the bros.’)
Ah, the silly e-mail. Braggadocio? Hubris? Sociopathy? Narcissism? Maybe even a bit of shame?
No way Goldman keeps someone around who saw the “collapse”, but kept peddling. Who saw himself as the “only potential survivor.” (That won’t fly with the big boys, I’m afraid.) The confession that he didn’t even know what the heck he was trading. Not that there are three people on the face of the earth that did, but honesty, well, that’s seldom the best policy. Better to pretend that you get it, which will make the guy on the other side of the trade unable to admit that he’s too dull to figure it out. Not to mention that the smart guys at Goldman get it for them. Even if they can’t spell monstrosities.
Even though the SEC no doubt has more on him than one paltry e-mail, Fabrice wasn’t thinking straight when he hit “send” on this one. Some things are best not put in writing, non?
Au revoir, Fabrice.
Better chance next time.
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