Fab Tourre's defense will not call any witnesses
The defense team for former Goldman Sachs bond trader Fabrice Tourre has rested its case without calling any witnesses, and summations in the government's case against him are scheduled to begin Tuesday.
The defense's decision follows earlier reports that hedge fund billionaire John Paulson would not testify in the high-profile civil case taking place in federal court in New York.
The U.S. Securities and Exchange Commission accuses Tourre of failing to tell investors that Paulson's hedge fund firm intended to bet against Goldman Sachs' Abacus 2007-AC1. The $2 billion offering was tied to subprime mortgage bonds and known as a synthetic collateralized debt obligation.
Tourre denies wrongdoing.
On Monday morning U.S. District Judge Katherine Forrest cited a July 28 letter by Tourre's lawyers saying they no longer plan to call Paulson and others on their witness list to testify.
Paulson's firm had helped to select the securities that were packaged into the deal. The SEC says Tourre told investors that Paulson's firm was investing in Abacus, suggesting he expected the price of the securities to rise, when actually the hedge fund was shorting it.
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The shorting of the deal was part of Paulson's broader bet against the U.S. housing market in 2007, which earned him Wall Street fame and billions of dollars.
—By Reuters with CNBC