Lawyers for Fabrice Tourre, the former Goldman Sachs trader who is being charged in New York for fraud, rested their defence on Monday without calling any witnesses. Lawyers say the unexpected move underscores the confidence, that Tourre's lawyers have, in their fight against the government.
The US Securities and Exchange Commission (SEC) has accused Tourre of misleading investors in a sub-prime mortgage investment deal in 2007, and of secretly helping billionaire John Paulson's hedge fund make a billion dollars in profit by betting against the fund.
The prosecution called 11 witnesses and rested its case on Monday. Eight of them were also on Tourre's witness list.
The final testimony was via a video statement by Michael Nartey, a former Goldman employee in London who marketed deal notes to IKB Deutsche Industriebank AG - one of the investors the SEC says lost money in the deal.
Tourre's lawyers had been expected to call Paulson to testify on his behalf. Instead, they asked the presiding judge to take the case away from the jury and rule in the trader's favour.
US District Judge Katherine Forrest rejected the request.
A Manhattan federal jury will hear closing arguments later today. Jury deliberations are due to begin on Wednesday.
Will it Help Tourre's Case?
Tourre's decision not to call on other witnesses could work in his favour.
"It's a sign that the defence believes that the SEC has not met its burden of proof," said Robert Mintz, a former federal prosecutor and now a partner at McCarter & English.
The SEC accuses Tourre of misleading some investors in the deal by not telling them that the Paulson & Co. hedge fund was betting against the product, known as Abacus 2007-AC1.
The government seized Tourre's personal and professional emails to prove that the 34-year-old banker, who raked in a $1.7m salary in 2007, enticed investors into the deal that was actually designed to fail.
Tourre has said that the regulator's key email evidence against him is inaccurate and has denied any wrongdoing. During his trial, Tourre termed the correspondence as a "silly, romantic email."
The mortgage product tanked when the US housing market crashed. However, Paulson made $1bn from the deal
Goldman Sachs, charged along with Tourre in 2010, settled the case for $550m without admitting or denying any wrongdoing.
The high-profile trial is an opportunity for the SEC to prove that it can win cases against powerful individuals on Wall Street, for unlawful activity that trigged the 2008 financial crisis.