Former Goldman Sachs junior executive Fabrice Tourre denied the fraud charge levelled against him by the US Securities and Exchange Commission as he finally took the stand on Wednesday.

The case against the mortgage trader revolves around a derivative stock called collaterized debt obligation, or Synthetic CDO, which played a huge role in the events leading to the subprime mortgage crisis.

In this case, the SEC accused Tourre of trumping securities regulations by "misleading" clients on the role of Paulson & Co in Abacus 2007-AC1. According to the SEC, Tourre was directly instrumental in a 2007 deal that led to investor loss amounting to US $1 billion.

However, Tourre said that he "wasn't trying to confuse anybody." He said that Paulson, who was cleared by the SEC, was willing to bet on the short side of the deal.

A day earlier, the SEC's main witness Laura Schwartz believed that Paulson was investing in Abacus instead of betting against it based on an email sent to her by Tourre. Schwartz is a former employee of ACA Capital Holdings Inc., who was appointed to choose the bonds on which the deal's performance was based.