Last summer, Fabrice Tourre didn’t turn around fast enough to see the bus coming at him. Goldman Sachs had given him a big push and put him in the front and center of their big bet on a crash in the residential mortgage securities market.
Tourre ended up as the Fabulous Fab after giving himself that nickname in a series of colorful emails. In one he wrote, “The whole building is about to collapse anytime now,” according to the complaint. “Only potential survivor, the fabulous Fab.”
I still use Tourre as part of my records management policy and education.
The Fabulous Fab Rule: Don’t write emails so provocative that they wind up reproduced on the front page of the Wall Street Journal.
What has happened to Tourre and his colleagues at Goldman Sachs?
Goldman settled the matter for $550 million, with $250 million going to investors and $300 million going to the SEC.
Louise Story and Gretchen Morgenson of the New York Times took another look at the Goldman mortgage desk and the prosecutions against it: S.E.C. Case Stands Out Because It Stands Alone.
According to the article, the SEC looked at Jonathan M. Egol who worked closely with the Fabulous Fab. “But Mr. Egol, now a managing director at the bank, was not named in the case, in part because he was more discreet in his e-mails than Mr. Tourre was, so there was less evidence against him, according to a person with knowledge of the S.E.C.’s case.” That just seems to reinforce the Fabulous Fab Rule.
Also, the story points out that Torre’s trading desk was using a shared email account or listserv to share the messages with the larger group.
The story about the Fabulous Fab Rule gets worse. The New York Times obtained additional information from a lost laptop.
[The information was] provided to The New York Times by Nancy Cohen, an artist and filmmaker in New York also known as Nancy Koan, who says she found the materials in a laptop she had been given by a friend in 2006. The friend told her he had happened upon the laptop discarded in a garbage area in a downtown apartment building. E-mail messages for Mr. Tourre continued streaming into the device, but Ms. Cohen said she had ignored them until she heard Mr. Tourre’s name in news reports about the S.E.C. case. She then provided the material to The Times.
That just makes the nightmare worse. An employee is sending out provocative emails, they are going to mass distribution list, and an unsecured laptop is getting the messages.
- S.E.C. Case Stands Out Because It Stands Alone by Louise Story and Gretchen Morgenson in the New York Times
- Emails from the Fabulous Fab in the New York Times database
- The Essential Lessons of the “Faithless Servant” by Kevin LaCroix of The D&O Diary
- The Fabulous Fab Rule – prior post on Compliance Building
- Goldman Settles; Fabulous Fab is Left on His Own – prior post on Compliance Building