Skip to Content

Why The SAC Capital And Fabulous Fab Cases Matter

July 30, 2013 Blog

The Feds have opened their substantial arsenal this week to take down Steve Cohen, the Biggest Fish on Wall Street, and a minnow, Fabulous Fab, or Fabrice Tourre, the former Goldman Sachs executive who allegedly defrauded investors in a complex mortgage bond called Abacus.

Both cases signal that the government is intent on letting Wall Street players big and small know that the “cop is on the beat” and that securities fraud is indeed a serious offense which will be dealt with harshly.

The SAC indictment, following the Raj conviction, shows that the hedge fund model of sourcing inside information, or what SAC traders call the “dark edge”, will be treated the same way the feds treat mob activity or drug cartels.

Little Fab, and others like him on Wall Street, should think twice before getting involved with deals that reap huge profits (and year end bonuses) but screw investors.

The Feds have clearly shot across the bow with the SAC complaint. Let’s see if rank and file bankers and executives on Wall Street like Fab get the message.

Disclosure: Zamansky LLC are investment and stockbroker fraud attorneys representing investors in federal and state litigation against financial institutions.