Feb. 21, 2014

Goldman Sachs trader, found liable for fraud, to teach economics core course

Updated on March 3, 2014: Tourre will not be teaching this course in spring quarter. Full story here.

With spring quarter class bidding opening next week, Economics students have the option to take the honors section of Elements of Economics Analysis 3 taught by Economics Ph.D. student Fabrice Tourre.  While students might not be calling him “Fabulous Fab” in the classroom, he is notable in the financial world as the former Goldman Sachs trader found liable this past August on six of seven counts of securities fraud for misleading investors in a complex investment product linked to mortgages.

In August of last year The New Yorker wrote that Tourre was the “only Wall Street banker to be found guilty of any charges having to do with the financial crisis” of 2008.

Both Goldman Sachs and Tourre were sued by the Securities and Exchange Commission (SEC) in 2010. In July of that year, Goldman signed a $550 million settlement with the SEC, neither confirming nor denying the allegations. The settlement did not cover Tourre, who had started with Goldman in 2001 and worked his way up to serve as a vice president in the company. He refused to settle, hoping to clear his name. Six months ago, a federal jury found him liable and, as of this January, he is still pushing to reduce the more than $1 million in penalties against him.

Tourre has a mathematics degree from the École Centrale in Paris and a master’s in operations research from Stanford University. While pursuing his doctorate in Economics at the University of Chicago, Tourre has served as a teaching assistant.

"People like Fabrice, who come from investment banking, are very useful in the [economics] program. As academics we tend to be on the outside, and investment banks tend to be closed. People are joking that economists develop these models, but the real world is much messier," one of his classmates told The Wall Street Journal.

—Sindhu Gnanasambandan