The US Securities and Exchange Commission waited more than three years to have a chance to shred the credibility of Fabrice Tourre, a former Goldman Sachs trader, in front of a jury. It finally had its chance this week.
Matthew Martens, the government's lawyer, and Mr Tourre, who has been accused of participating in a scheme to defraud investors, verbally sparred over two hours over what Mr Tourre knew about a 2007 trade he helped to structure.
"So the statement was false?" Mr Martens asked just minutes after Mr Tourre took the stand, challenging him over an email he had written. "It was not accurate," Mr Tourre responded, frustration rising in his voice.
Mr Tourre testified at the midpoint of the trial, one of the biggest cases to come out of the 2008 global financial crisis. For Mr Tourre, an unfavourable verdict from the civil trial could yield a fine, or worse, a ban from the securities industry.
Mr Tourre and Mr Martens sparred over what could turn out to be a critical misstatement Mr Tourre made in an email to ACA Management, a company that invested in the trade in question and helped to construct it.
In 2007, at Goldman's behest, ACA helped to put together a trade for the hedge fund Paulson & Co. The firm and its head, John Paulson, sensed that the housing market was heading for a collapse and made more than $US1 billion by betting against the security ACA had assembled. Earlier this week, a former ACA executive, Laura Schwartz, testified that had she known Mr Paulson was placing a negative bet she never would have gone ahead with the transaction.
A central question in the case is whether Mr Tourre should have corrected ACA's impression that Paulson & Co had a positive outlook on the security. In other correspondence, a January 2007 email that was forwarded to Mr Tourre, Ms Schwartz described the Paulson & Co hedge fund as having an "equity perspective", indicating that she believed the hedge fund wanted the security to rise in value.