Tags: Goldman | Fined | Trader | Bet

Goldman Fined for Failing to Prevent Trader’s $8.3 Billion Bet

Friday, 07 Dec 2012 02:46 PM

 

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Goldman Sachs Group Inc. will pay $1.5 million to settle U.S. regulatory claims the firm failed to supervise a commodities trader who concealed an $8.3 billion position.

Goldman didn’t appropriately oversee trades made by Matthew Marshall Taylor in 2007, the U.S. Commodity Futures Trading Commission said Friday in a statement. The firm suffered a loss of more than $118 million while unwinding the bet, according to the CFTC.

The CFTC accused Taylor of concealing the trades in a Nov. 8 complaint filed in federal court in New York. He hid the position by bypassing the New York-based firm’s internal system for routing trades to the Chicago Mercantile Exchange and manually entering fabricated futures trades in a different internal system, according to the complaint.

“Taylor’s activity was flagged by our controls,” Goldman Sachs said in a statement Friday. “After initially providing false explanations during the trading day, Taylor admitted his conduct following market close and was subsequently terminated. Since these events, we have enhanced our controls.”

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