While Main Street vilifies Goldman Sachs, and the federal government widens its probe into the bank’s selling of mortgage securities, an unlikely folk hero is emerging on Wall Street: Fabrice Tourre, the 31-year-old Goldman employee named in the Security and Exchange Commission’s suit.
Already, Fabulous Fab—as he calls himself in e-mails released by the SEC—has two Facebook fan pages devoted to him. New York magazine breathlessly reported on his life, including the $4,000-a-month Manhattan apartment he once rented. The 15 Wall Street employees—20- and 30-something bankers, traders, and former Goldman employees—whom NEWSWEEK interviewed for this piece say they admire the way Tourre foresaw the collapse in the housing market and structured a lucrative deal for his client, hedge-fund impresario John Paulson. Goldman Sachs refused to comment or to pass along Tourre’s contact information. “Everyone thinks he has a bit of swagger,” says former investment banker and Columbia Business School professor David Beim. “Everyone is cheering for him.”
Two nights after Tourre testified before the Senate and denied the SEC’s charges, young Wall Street types gathered at bars on Pearl Street in lower Manhattan. They drank draft beer as they bantered about the Mets’ winning streak and the trading that day. Then came the questions about Tourre. One banker called him a political scapegoat. Another called him a hero for masterminding Abacus 2007, Goldman’s portfolio of mortgage investments that the SEC alleges misled investors. No one would give their name, since the bankers and traders were concerned about being fired for speaking on the record, but to them Tourre was simply doing his job—not to mention doing it well.
For these young Wall Street types, Tourre embodies the culture of the financial world and offers a road map for success. He’s the real-life Gordon Gekko from the movie Wall Street: the cocky alpha male who writes e-mails in which he calls himself the “only potential survivor ... standing in the middle of all of these complex, highly leveraged, exotic trades.” He’s a doppelgänger to Michael Lewis’s autobiographical protagonist in Liar’s Poker, who sells bad products to unknowing chump investors, and he’s becoming a cultural icon to his contemporaries because they empathize with him. One of them could just as easily have been the salesman on the Abacus deal, if only they had been that smart or lucky. “There’s a self-serving role in this. If what he did is wrong, then what they do is wrong on a daily basis,” says Adam Galinsky, professor of ethics and leadership at Northwestern University’s Kellogg School of Management. “It’s not wrong to them, because it’s the water they swim in.”
This fascination with Tourre also spells disaster for transforming or regulating Wall Street. The future Fabulous Fabs of the world will not be deterred by this case, says Wall Street historian Charles Geisst, because this line of work will continue to appeal to those who want to make piles of money or develop financial products in lieu of curing cancer, building bridges, or marketing tangible products. To the bankers, Tourre’s e-mails in which he expresses doubt about the validity of the products he’s selling only make him that much more likable. “The fact that his e-mails have a slight sarcastic bentd to them makes them more noteworthy,” says Galinsky. “He’s not just a machine. He has a playful nature. At some level, the tone mitigates it. At some level, it makes it more horrific.”
Wall Street financial historians and business-school professors predict that Tourre will land on his feet with a hefty salary. He may not work again for a major bank such as Goldman Sachs, since these institutions disdain publicity—particularly the kind that lays bare their inner workings. But after Tourre wraps up his current leave of absence from Goldman (followed by a long sabbatical and, most likely, a vacation spent on an exotic beach), Wall Street insiders predict he will easily find another job in the financial world. “My guess is that a hedge fund would love to have a guy like this,” says Geisst.
The only cultural aspect of Wall Street that may shift as a result of Tourre’s tale is the way bankers, traders, and analysts communicate. “The bravado of what people do will likely be the same,” says Donna M. Hitscherich, professor at Columbia Business School. “It’s just a question of whether they put that in an e-mail.” Note to young Wall Street: you may also want to avoid referring to yourselves in the third person.
With McKay Coppins