The Dullest Historic Trial of All Time

20.09.2013 15:23

If you should be hit with an urge to
wander over to see Fabrice Tourre’s civil
fraud trial in the famous Goldman Sachs
Abacus case, be warned: the courthouse
guards may give you the once over and
send you to the “overflow room” to watch
on a monitor. It’s one of the pivotal
moments in financial history, right? It’s
not like there can be enough seats for
everyone.
Ignore the guards. Go straight to judge
Katherine Forrest’s courtroom. Come late
if you want (as, full disclosure, I did).
There are plenty of seats. Perhaps on
earlier days the courtroom was crowded.
By now, though, folks seem to have
learned their lesson: this may be the
dullest historic trial of all time.
I had to see the trial for myself partly
because, having sat through trials of
many sorts and found several riveting, I
didn’t really believe this one could be as
soporific as Bloomberg’s Bob Van Voris
made it sound a few days ago . Of the jury,
Van Voris wrote:
“Some rubbed their eyes.
One’s eyes were closed,
Head propped on a hand…”
I put in the line breaks. Bob, I’m truly
sorry to have doubted you: the Fabrice
Tourre trial is a veritable poem of
sonorous somnambulence. As Alexander
Pope wrote ,
“Here one poor word a hundred clenches
makes,
And ductile dullness new meanders
takes.”
The “one poor word” Pope was thinking
of may have been “selected,” on which
Tourre and the prosecutor, Matthew
Martens, spent much of the morning that
I observed. The question they debated
was whether the investor John Paulson
helped “select” the infamous Abacus
portfolio, or whether the investor on the
other side, ACA Financial Guaranty,
selected it and Paulson selected another
portfolio that just happened to turn out …
well, exactly the same as the one ACA
chose. Maybe there is a distinction; if so,
it’s one that Aristotle himself would have
struggled with. But then, Aristotle wasn’t
an investment banker.
All this doesn’t bode well for Tourre.
Tourre seemed reluctant to admit the
obvious here: Some folks (Paulson and his
colleagues) were looking for a patsy, and
other folks (ACA and a German bank that
was the other investor in the deal)
volunteered for the job. Is it illegal to
take advantage of that kind of stupidity? I
don’t know, and it’s worth noting that
ACA’s separate suit against Goldman was
dismissed. But given the issue at hand, it
doesn’t help Tourre to multiply fine
distinctions and come off as a know-it-all.
This is a case that, whatever its merits,
will never suffice to carry the expectation
freighted with it. The narrative that much
of the country was hoping for is one that
would explain how a mass mortgage
mania took the economy to the brink and
left millions of debtors — “ les pauvre
petits subprime borrowers,” as one of
Tourre’s emails calls them — facing
foreclosure, with a courtroom climax that
wraps it all up into a neat package.
Instead we seem to be headed right to a
denouement: the civil trial of a junior
banker smiling tightly in the witness
chair, carefully parsing e-mails as the
jurors struggle to stay awake.