When Large-Seeming Fines Are Too Low

by Dave Schuler on March 13, 2014

When I heard that Goldmanite Fabrice Tourre had had a $825,000 fine levied against him for fraud:

A U.S. judge on Wednesday ordered former Goldman Sachs Group trader Fabrice Tourre to pay more than $825,000 after a jury found him liable for defrauding investors in a subprime mortgage product that failed during the financial crisis.

The decision by U.S. District Judge Katherine Forrest in Manhattan came in one of the prominent Wall Street cases linked to the crisis,and one of the few in which an individual was held personally responsible for wrongdoing.

my immediate reaction was that it was far too small. That’s just about half of the compensation he received in 2007, the year of the fraud.

It’s been widely reported that Tourre is unrepentant and unremorseful. Of course he is. When fines are so non-punishing they’re an acceptable risk. For somebody in his position the fines should have been in the multi-million dollar range. What he got was just a slap on the wrist.

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