The federal government’s civil lawsuit against Fabrice Tourre, a former Goldman Sachs trader accused of misleading investors in a mortgage security six years ago, went to a jury on Wednesday morning, setting up the end to one of the most prominent cases to arise out of the financial crisis.
After nearly an hour and a half of legal instructions, the presiding judge, Katherine B. Forrest of the Federal Court for the Southern District of New York, formally allowed the nine-member jury to begin deliberations.
“The most important part of this case is about to begin,†Judge Forrest said, soon before the jury entered its deliberation room at 10:50 a.m.
It is now up to the nine jurors â€" who include a former stockbroker, a minister and a graphic designer â€" to decide whether Mr. Tourre committed fraud as he set up a complex investment tied to mortgages. The Securities and Exchange Commission accused Mr. Tourre of misleading investors about the role of a client, the hedge fund Paulson & Company, which wanted to bet against the security.
He faces seven counts of fraud. Because the S.E.C.’s case is a civil one, the agency need only have convinced jurors with a preponderance of evidence, rather than beyond a reasonable doubt, the standard in a criminal trial.
The jury must unanimously agree on each count.
The jurors listened to more than two weeks’ worth of sometimes combative testimony, including from Mr. Tourre himself. Much of the trial was laden with complex jargon that both the S.E.C. and the defense team acknowledged would likely make the jury’s eyes glaze over. Several jurors appeared to doze off during the financially denser portions of the trial.
On Wednesday, however, much of the jury appeared alert, scribbling notes in their jury instruction packets. Mr. Tourre’s team sat quietly at their table, with Mr. Tourre sitting up in a dark suit and light blue shirt. The S.E.C.’s team also sat wordlessly in their assigned spots, with the lead lawyer, Matthew Martens, assuming his usual slouched position.
The mood inside the downtown Manhattan courtroom felt lighter: Judge Forrest’s courtroom deputy wore a bow tie, a tradition of his when a jury begins deliberations.
“Good luck,†Judge Forrest said before the jury headed toward its deliberation room. The courtroom deputy wheeled in a huge cart of exhibits from the trial, while a marshal sat sentry outside the door.
Once the jury decides on a verdict, it will be up to the judge and the S.E.C. to decide what penalties, if any, are appropriate. Judge Forrest will have the final say on financial penalties, from the forfeiture of any profits made from the investment to fines.
A forfeiture order would be relatively subjective, depending on the definition of profits: Goldman earned fees for its work in constructing the mortgage security but lost money on its own investment position. Fines, however, could range from $5,000 to about $130,000 for each violation.
Only six of the seven counts would be eligible for fines, because one of the charges is tied to Goldman, which already settled charges by paying $550 million.
Goldman, which is already paying the bill for Mr. Tourre’s legal fees, can pay for any disgorgement of profits ordered by the court but cannot pay fines, legal experts say.
While Judge Forrest could order up monetary penalties immediately, judges typically take more time and ask each side for legal briefs on what they think is appropriate. Judges may also request additional testimony, but experts say that is rarely done.
If Mr. Tourre is found liable, he also faces a potential ban from the securities industry. But any decision to bar him from working on Wall Street, and for how long, lies solely with the S.E.C.
