Lawyers For Goldman Sachs (GS) Ex-Trader Tourre Don’t Call Defense Witnesses in Civil Fraud Trial

Lawyers for former Goldman Sachs Group Inc. (NYSE:GS) trader Fabrice Tourre surprisingly failed to call any witnesses in his defense against securities fraud charges during a Monday court hearing, reports the Wall Street Journal.

The decision not to call any witnesses is the latest development in the high-profile civil trial, and could mean that defense lawyers are confident about winning.

The case has been brought against Tourre by the Securities and Exchange Commission, which alleges that he misled investors about the role hedge fund Paulson & Co. played in a mortgage-related transaction. The hedge fund bet against the transaction but helped to pick the mortgage bonds related to the transaction, which involved a synthetic collateralized debt obligation (CDO) known as Abacus 2007 AC-1.

Likely witnesses for the defense who were not called include John Paulson, founder and president of Paulson & Co., and Daniel Sparks, a former Goldman mortgage department head.

Goldman Sachs settled with the SEC over fraud charges in 2010, for $550 million. Though Goldman didn’t admit nor deny wrongdoing, it conceded that part of its marketing materials were “incomplete," since they failed to note Paulson’s role in tweaking the investment portfolio.

Last week Tourres said he wasn’t trying to confuse anyone and that no one at Goldman ever voiced concerns about disclosing Paulson & Co’s role in the deal.

As the value of the CDO fell, Paulson & Co. made more than $1 billion, while investors who backed the transaction lost money. The SEC has not charged anyone at Paulson & Co. with wrongdoing.

Closing statements from both sides were expected on Tuesday morning.