A former Goldman Sachs trader has been found liable on six
counts of civil securities fraud in New
York, the fist major victory for the Securities and
Exchange Commission in a case brought up by the financial crisis, media reports
said.  

Fabrice Tourre, nicknamed "Fabulous Fab", was
found guilty of six of seven SEC fraud claims. He faces potential fines and a
possible ban from the financial industry. The exact punishment will be
determined at a later hearing, reports said.

The case provides the SEC with an opportunity to produce a
successful case after losing a series of cases in the aftermath of the 2008
financial crash.

The regulator had accused Tourre of misleading investors
about sub-prime mortgage securities that he knew would collapse – as did indeed
occur. The conduct, reports said, enable a Goldman Sachs client, Paulson &
Co, to secretly bet against the investment.

"We are gratified by the jury's verdict," said
Andrew Ceresney, co-director of the SEC's enforcement division, was quoted as
saying. "We will continue to vigorously seek to hold accountable, and
bring to trial when necessary, those who commit fraud on Wall Street."

The SEC alleged that Tourre, used a product known as Abacus
2007-AC1 to mislead investors. The regulator alleged that he failed to declare
that Paulson had helped choose, and intended to bet against, mortgage
securities underlying the 2007 deal.

Torre, a mid-level executive at Goldman Sachs, was the only
individual ever charged in relation to Abacus. Goldman Sachs was hit with a
$550 million fine to settle SEC charges in 2010, without admitting or denying
guilt.