http://www.bloomberg.com/apps/news?pid=20601010&sid=aDgzfxGflUMg April 25 (Bloomberg) -- Fabrice Tourre, a Goldman Sachs Group Inc. executive director facing a fraud lawsuit in the sale of a mortgage-linked investment, said an index that facilitated derivatives trading in the market was "like Frankenstein."
The so-called ABX index is "the type of thing which you invent telling yourself: 'Well, what if we created a 'thing,' which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?'" Tourre said in a Jan. 29, 2007, e-mail released yesterday by Goldman Sachs. Watching the index fall is "a little like Frankenstein turning against his own inventor."
Goldman Sachs, the most profitable securities firm in Wall Street history, released more than 70 pages of e-mail and other documents yesterday ahead of a U.S. Senate subcommittee hearing on the firm's actions throughout the mortgage meltdown. The firm disputes the U.S. Securities and Exchange Commission's claim that Goldman Sachs and Tourre, now 31, misled investors in a 2007 collateralized debt obligation about the role played by hedge fund Paulson & Co., which bet the CDO would collapse.
