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Not only does Goldman Sachs need a new audit committee, but the SEC also needs to tell the public why it singled out and selectively prosecuted Fabrice Tourre, a junior level employee at Goldman Sachs, and why it didn’t prosecute the entire network of criminals at Goldman Sachs. The NYT has an incredible piece about a NYC woman who received a laptop from a friend, who found the laptop in the trash. It turns out that the laptop was that of Tourre. Incidentally, the laptop contained all of Tourre’s files intact and continued to receive incoming emails. The woman, Nancy Koan, according to the NYT, turned the computer over to the NYT. Among the items retrieved from the laptop is an email correspondence to the SEC from Tourre’s lawyers, including Pamela Chepiga of Allen & Overy, wherein they contended that “singling Mr. Tourre out for criticism regarding the content of this clearly collaborative effort is unreasonable.”

At the height of the housing boom, the 26th floor of Goldman Sachs’s former headquarters on Broad Street in Lower Manhattan was the nerve center of Goldman’s fast-growing mortgage trading business. […] At one trading desk sat Fabrice Tourre, a midlevel 28-year-old Frenchman who was little known not just outside Goldman but even inside the firm. That changed three years later, in 2010, when he achieved the dubious distinction of becoming the only individual at Goldman and across Wall Street sued by the Securities and Exchange Commission for helping to sell a mortgage-securities investment, in one of the hundreds of mortgage deals created during the bubble years.

How Mr. Tourre alone came to be the face of mortgage-securities fraud has raised questions among former prosecutors and Congressional officials about how aggressive and thorough the government’s investigations have been into Wall Street’s role in the mortgage crisis.

Across the industry, “it’s impossible that only one person was involved with fraudulent activities in connection to the sales of these mortgage securities,” said G. Oliver Koppell, a New York attorney general in the 1990s and now a New York City councilman.

The S.E.C. has not said why it focused on just one Abacus deal, even though other mortgage securities created by Goldman and other banks had similar designs and disclosures.

Tourre will not face any criminal charges: “Even as Mr. Tourre awaits trial in the civil fraud case, it seems that he will not face criminal charges. When the S.E.C. referred the case to the Justice Department, the commission’s top enforcement lawyer, Robert S. Khuzami, told his counterparts there that he did not believe it was a criminal case, according to two people briefed on the discussions.”

Others are chiming in and doubting the veracity of the “good samaritan turns over evidence” story and pondering whether the NYT hacked into Tourre’s emails.

The Times version of events, admittedly, appears to be too neatly and conveniently packed; however, whether the NYT hacked Tourre’s emails is beside the point. The issue, here, is that the SEC went after a junior level employee, did not prosecute the bigwigs at Goldman Sachs, and still has not prosecuted any of the organized criminals at Washington Mutual, Deutsche Bank, Lehman Brothers, Bank of America, the American International Group, and Moody’s Investors Service. Instead, billions of taxpayer money were given to them in the form of TARP funds, only so that these institutions could later institute a foreclosure crisis of epic proportions. History might find this to be the biggest heist ever.

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