the government named this man, fabrice tourre, in its fraud suit. tourre's response was emphatic. >> i deny categorically the s.e.c.'s allegation, and i will defend myself in court against this false claim. >> reporter: the key issue in the case is whether tourre should have told a company called a.c.a. and other investors that hedge fund manager john paulson was preparing to bet against their deal, and that paulson would have a hand in shaping the security he was shorting. tourre denied the charge. >> i did mention to a.c.a. that paulson's expectation was that they were buying credit protection on senior tranches of that portfolio. >> that is the same thing as saying they are going to buy a short position, yes. >> reporter: in e-mails, tourre described himself as the fabulous fab standing in the middle of these "exotic trades." today he was more humble. >> i regret these e-mails, and they reflect bad on the firm and myself. i wish i hadn't sent those. >> other goldman executives also had a chance to regret the emails they sent or were forced to expl

fabrice tourre, in an e-mail saying in 2007 according to the complaint -- more and more leverage in the system, the whole building is about to collapse anytime now. only potential survivor, the fabulous fab, referring to himself, setting up and structuring this portfolio at the behest of paulson. goldman sachs in many cases becoming a scapegoat, if not more, for all of this, and just this week revelations that rajat gupta, a goldman sachs board member, who's already said he's not standing for reelection, is under investigation in the ongoing investigation of insider trading. a rough time for goldman sachs. the company says it will vigorously contest these charges, and as we had, try to defend its reputation, a reputations that's now under siege. erin? >> thanks very much, scott cohen. let's get the market reaction. bob, off the lows for the market for now. >> but not by much. the most interesting thing is over here at the politics and the timing of the announcement. we have a huge financial regulatory reform bill up in the senate, probably in the next couple weeks. senator dodd has been

lloyd blankfein and executive fabrice tourre testify before a senate committee. federal reserve policymakers meet to decide what's next for interest rates. and monday, quarterly results from the big cat. we'll find out how heavy machinery maker caterpillar's doing. >> susie: ford is recalling about 33,000 of its 2010 cars and s.u.v.s. the automaker needs to replace potentially faulty front seats. the models are the 2010 explorer, explorer sport trac, mercury mountaineer, as well as the 2010 ford fusion and mercury milan. ford said it had no reports of accidents or injuries related to the defect. customers and ford dealerships will receive letters on how to deal with the problem next week. >> tom: competition among e-readers is heating up. today, barnes and noble's nook added a software update allowing users to surf the web and play games like chess and sudoku. amazon's kindle already has a basic web browser. this weekend, a test of sorts will start with the kindle going on sale in dozens of target stores in minneapolis and florida. more stores will sell it later

guest: fabrice tourre, he refers to himself as the fabulous fab. obviously, some of these executives should probably go to jail. there was a prominent case against two bear stearns hedge managers who were accused of something similar to this case, about the circumstances were much different. that case failed at the criminal level. a lot of people were disappointed by the failure to pass the finance reform legislation, but i do not think we are near the end of that road. in the next few days, there is a better chance than not that we will see something emerge in the senate. host: . democrats -- illinois. democrats line. caller: someone said earlier that this hearing is going to just the theater, but it will only be that if we allow it to be. we have to pay attention, tell our congress people and center is what we need to be done. we might get something of this, but we have to pressure them. host: what is most surprising about today's hearing? guest: there would be a surprise if the committee releases some e-mails or charts that we have bought seen b

goldman released e-mails from fabrice tourre, the trader named in the s.e.c.'s suit against the firm, and in a note to a girl friend in 2007 about the impending subprime collapse he says, quote, i've managed to sell a few abacus bonds to widows and orphans i met at the airport, apparently those belgians adore synthetic cdos. two top u.s. lawmakers say these e-mails show just how much financial reform is needed. >> there's something terribly wrong about a system in a country of ours where you make billions of dollars by making nothing or producing nothing, but merely taking advantage of an economic situation. >> we've got to end once and for all the casino atmosphere of wall street, where they're gambling basically on synthetic ideas and so forth. with somebody else's money. putting banks and our whole banking system at risk, and producing nothing. >> aides say senators chris dodd and shelby did not meet after their appearance on "meet the press" to discuss the financial reform bill. senate majority leader harry reid, though, says a procedural vote is set to beg

lloyd blankfein and trader fabrice tourre testify before a senate committee. federal reserve chairman ben bernanke appears before the national commission on fiscal responsibility. also, ford reports quarterly earnings, and we get an update on the automaker's turnaround plan as we talk with c.e.o. alan mulally. a major flight delay for american airlines. the carrier postponed today's sold out maiden flight between chicago and beijing. american blamed the delay on a disagreement with chinese aviation authorities. the airline wanted to land and takeoff in the early afternoon. instead, it was given overnight slots. american hopes to resolve things and is holding off launching the new service until at least may 4. customers are being offered full refunds. >> tom: more bad news for u.s. newspapers as readers keep heading to the internet. nationwide, weekly newspaper circulation fell nearly 9% over the last six months. but that's not as steep as the previous six months when it fell just over 10.5%. free news online is largely blamed for the decline. among the 25 bigg

lloyd blankfein and executive vice president fabrice tourre about the case next tuesday. meanwhile, member the showdown over financial reform brewing last week? well, it may not happen after all. nancy cordes is our congressional correspondence. nancy, this is a real about-face for republicans. >> reporter: that's right, katie. it appears bipartisanship is back from the dead here on capitol hill. suddenly both parties say they want to make a deal. just last week, republicans were expressing universal opposition to the financial reform bill. >> it will lead to endless taxpayer bailouts. >> reporter: but now they are back at the bargaining table. >> we are pretty close. we have the same goals. we want too big to fail to go away. >> reporter: the change in tone comes after democrats accused the g.o.p. of siding with big banks. >> to say that republicans are representing wall street couldn't be further from the truth. >> reporter: not that wall street isn't trying mightily to influence the outcome. citigroup spent $1.3 million lobbying congress in just the first quarter of th

uncovered some e-mails, specifically an e-mail from a goldman vp, fabrice tourre. and you know the name well by now. charged in the s.e.c.'s complaint. he wrote this to a friend in january of 2007. he writes, "more and more leverage in the system. the whole building is about to collapse anytime now. only potential survivor, the fabulous fab," referring of course to himself, fabrice. "standing in the middle of all this complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities." fab fab. i don't know. >> good luck, fab. >> good luck to you. all right. more "fast money" and special coverage of the goldman situation coming up next. >> the charges that could change wall street forever with the fattest of the fat cats officially accused of fraud, our traders take on the top question of the day. have financials finally met their fate? find out as america's post-market show continues. one: kills weeds to the root. two: forms a barrier, preventing new ones for up to four months. roundup extended cont

to discuss financial reform and, as lloyd blankfein and fabrice tourre will take the stand, here to handicap it all for us is chris whalen, of institutional risk analytics. chris, great to have you on the fast line tonight. >> good afternoon. do i really hear you guys gunning the home builders? please. we have to spend some time after the show. >> it's not the home builders. it's -- >> 3/4 of a million delinquent mortgages festering over at the -- >> it's not really the home builders, though. it's a short interest and a supply chain on the actual building product -- >> let's go back -- >> it's a different thing. >> let's go back, guys, to the topic at hand because it is a big week for the financials, chris. what sort of trading pattern do you anticipate given the uncertainty that will, you know, unfold next week? >> oh, no. everything's going to go up next week. we're going to have a good gdp number. we're going to all cheer. then we're going to run higher. >> home builders too? >> go down to washington and defend the kingdom. but the thing of it is, as i've said, i think goldman has a bette

aca sends the e-mail for fabrice tourre and others at goldman, including 55 of the 123 selected by paulson. now, that means -- let me just pause here. this is very important. goldman maintains that aca was in fact the portfolio selector. come back with me. i want to stay on the full screen. goldman says they were independent, they were the selector. there's no reason to deny that. they rejected 68 of paulson's recommendations, okay? they accepted 55 and the list at this point was 86. let's go to the third point on the timeline. this gets us into february 2nd, 2007. after meetings with paulson and tourre. the aca e-mails paulson, toure and others on which paulson and aca concurred, plus 21 others. so at this point they are in agreement in i on 82, but insert 21 others. finally i think we have the clincher on this. s. >> then deleting 8 of the mortgage-backed securities recommended by aca and leaves the rest alone. i think that's the end of the time did not line -- there's one more. february 26th, '07. after further discussion, paulson and aca agree on a reference portfolio of 90 rmbss for a

also expected to testify tomorrow, goldman's fabrice tourre. he calls himself fabulous fab, i've heard. helped concoct many of these iffy investments. he's also gotten e-mail trail. in one of them, he told his girlfriend this, "not feeling too guilty about this, one of my jobs is to make capital markets more efficient. so there is a noble skpetical reason for my job. amazing how good i am convincing myself." now joining us sonny hoffman and alexis glick who started her career at goldman sachs. welcome to both of you. alexis, you know, you've obviously been following this along and you started at goldman. you know this place. they're standing firm, day didn't do anything wrong. the way i see it, and again, i'm a doctor, you're a financial person, sonny's a lawyer, so it makes for a good joke, but the way i see it, they're taking their own money and investing thisn things that are more surefire and taking investors' money and investing in things that weren't as stable, even though they knew that. is that fair and is congress going to buy that som

particular former employee who is being talked about, actually, i believe he's still currently there, fabrice tourre heads a london office. there were e-mails that the committee uncovered that dealt with some of his communication, personal stuff he wrote but on company e-mail. it goes like this. remember his first name is fabrice. when he refers to himself as the fabulous fab standing in the middle of all these complex highly leveraged exotic trades he created without necessarily understanding all the implications of these monstrosities. . that kind of a comment where he seems to imply that there is some sort of misleading nature to this and he seemed to have kind of fun with that. now, that's e-mail from awhile ago. he'll be asked to answer for that. he's one of the employees named by the s.e.c. in some separate civil charges. so expect heavy-duty politics today. a lot of defensiveness perhaps from goldman sachs based on what we've read what they're planning to say and it should be an exciting back and forth about an issue that's got a lot of people around the country quite angry. >> a lot of e-mai

will it be fabrice tourre who was relatively junior and wasn't making the calls here or someone higher up? >> we don't have criminal charges. who knows. it's a long way away in terms of will this go to court, wills they they settle? it's hard to say if the scapegoat will be lower. usually when they get out of control someone higher up has to leave. i don't think we're at that point right now. >> what about everyone else. lloyd has the backing. what about david vinner and mr. cohn, anyone losing support from your reporting? >> no. i think what you're seeing is typical when an institution is under attack like when a family is under attack people rally. you're not seeing a lot of sort of division in terms of internally. i think there's always questions about how things are handled and maybe an overall strategy about all the -- from the pundits. internally you're not seeing that yet. >> all right. thank you very much, susan craig. we appreciate it. against the backdrop of goldman sachs, the sec case, and yesterday's big earnings report from citi, citi is doing a day two and that's a shareh

named in that suit is trader fabrice tourre, now on paid leave from goldman.e defended himself vigorously in today's senate testimony. watch. >> mr. chairman, as you know, the securities and exchange commission recently filed a civil suit alleging that i failed to disclose to investors certain material information regarding a transaction that i helped to structure named abacus '07 ac 1. i deny categorically the s.e.c.'s allegations, and i will defend myself in court against this false claim. >> larry: what is your read on him? >> well, i mean, going after a guy named fabrice, come on. it's just like in junior high. essentially, they've singled out the frenchman. they've singled out him as the scapegoat for all of this. there is a lot of fingers that were in that pie. >> larry: help me. were they investing in mortgages that they knew that people weren't going to make the payments on the mortgage? and they asked investors to invest with them. >> and as time went on, as they saw in '06 and '07 that things were getting pretty shaky, they started doing much more be

. >> brown: fabrice tourre was the only goldman employee directly accused in a securities and exchange commission civil suit alleging fraud. the s.e.c. claimed he marketed investments designed to lose value. but tour insisted today that was not the case. >> i deny, categorically, the s.e.c.'s allegation. and i will defend myself in court against this false claim. i appreciate the opportunity to appear before the subcommittee to answer these false charges. i wish to repeat-- i did not mislead i.k.b. or a.c.a., two of the most sophisticated institutional investors in these products anywhere in the world. >> brown: tourre did say he regretted internal emails in which he called himself "the fabulous fab" and boasted of his financial exploits. later, in a tense exchange, chairman levin asked dan sparks, the former head of goldman's mortgage department, whether he should have told clients when he was betting against their trades. levin quoted a goldman email that used an obscenity. >> june 22 is the date of this email. "boy, that timberwolf was one ( bleep ) deal." how much of that ( bleep )

all eyes were on him partly because of his nickname -- >> my name it fabrice tourre. >> reporter: a frenchmanressed like convicts were relentless -- >> you can't even accept responsibility, a small amount of responsibility. >> i firmly believe that my conduct was correct. >> i do not think that we did anything wrong. >> i don't have regrets about doing things that i think were improper. >> you got no regrets? you ought to have plenty of regrets. >> reporter: the protesters dressed as inmates. >> all your money won't keep you out of jail. >> reporter: ended up being could raled by police as photogs bounced off walls and into each other. talk about the need for regulation. >> no running in the hall. >> reporter: jeanne moos, cnn, new york. >>> you can always follow what's going on here in "the situation room." i'm on twitter. you can get my tweets. go to twitter.com@wolf blitzer cnn. that's all one word. i'm wolf blitzer in "the situation room." "john king, usa" starts right now. >>> thanks, wolf. developing news tonight on immigration. number one, an increasing number of national republica

fabrice tourre, fabulous fab, that he calls himself and refers to in e-mails the committee read yesterday, she talked about the first panel in her column and said she thought that they came across very arrogant. guest: they did. it is something there that -- iit is a once-in-a-lifetime thing. it is uniformly painful to go in front of these senators who are going to say what they want to say regardless. these guys held on to some sort of resolve of arrogance. obviously they did not want to be there. it was just a terrible day for the goldman sachs name did you mention fabulous fab -- a strange pop culture references, millie the nellie, one of them was named fab -- millie vanilli, and they had a song that said blame it on the reagan. -- blame it on the rain. host: you mentioned senator mccaskill, one part of our q&a -- the q&a where she said there could be other ceo's up here with you. it is not just your firm. maybe it is a bit unfair that goldman sachs is the only firm up here today. guest: it is unfair. but you know it was bound to happen. this was such a crash at the intersection of mai

situations is that it's entirely possible this young guy, who's now holding the whole firm hostage, fabrice tourre it fraudulently. if he did, goldman has no defense. what i would emphasize is that this guy is way too powerful. the hearings will go badly. goldman new they were going to have a well notice, knew they were going to get prosecuted. the main thing you have to understand is that goldman has basically said, government, you're just dead wrong. instead of saying, government, we're sorry, what do you need to do? in order to end this, if it's a settlement, they will have to pay the largest fine in history and it's questionable whether senior management will be able to stay. a lot of this is goldman's doing. >> but i just -- i've got to ask you, try to separate the fact that you worked there and just -- >> i don't think i could be more negative about goldman than i just was. >> i think you could. >> really? >> yeah. i think if you just separate and look at the charge, the charge, accused of it. >> it's not a frivolous. >> but why isn't it criminal? i don't understand. i'm not the only one ask

we'll get testify and see for the first time fabrice "fabulous f fa bth b" tourre. >>> joining us is bill ackman, manager the per shing square capital management and the subject of a new book out "confidence game" about his six-year battle with mbia as he warned investors of overleverage. this is a very timely story given everything considered today and financial regulatory reform. thanks for being here. >> sure. thanks for having me. >> we were talking as scott was reporting on goldman you have some thoughts on what's happening there, too. again, everything that happened in this book is very telling for about weights being considered right now in washington. >> what's interesting about the book, number one, in this book i'm a short seller, a company called mbia and it's a book about bond insurers, which play a role in goldman sachs. about people making a lot of money, losing a lot of money, a book about the s.e.c., our efforts to get s.e.c. involved in the mbia story. so i was investigated by eliot spitzer, by the s.e.c. for my critical analysis i wrote on mbia. it was an interestin