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.