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Ex-Goldman Trader Accused of Hiding $8.3 Billion Position

10 Nov 2012

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Matthew Marshall Taylor,  Ex-Goldman Trader



(Bloomberg) A former Goldman Sachs Group Inc. (GS) commodities trader was accused by U.S. regulators of concealing an $8.3 billion position and causing the firm to lose $118 million.


Matthew Marshall Taylor in 2007 fabricated trades and obstructed the firm’s discovery of his position, risk and profits and losses, the U.S. Commodity Futures Trading Commission said in a complaint filed yesterday in federal court in New York.


Taylor concealed the position by bypassing the 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. Goldman Sachs, which wasn’t identified in the CFTC lawsuit, said Taylor allegedly made the trades while employed at the firm.


“Matt Taylor provided false explanations when confronted about irregularities we detected in his account during the Dec. 14, 2007, trading day,” Michael DuVally, a Goldman Sachs spokesman, said in an e-mailed statement. “He admitted his misconduct following the market close, and was promptly removed from his job and terminated soon thereafter.


‘‘Since these events, which had no impact on customer funds, we have further enhanced our controls.’’
By Dec. 13, 2007, ‘‘Taylor’s scheme culminated in his concealment of a notional value of an approximately $8.3 billion long e-mini futures position,’’ according to the complaint. E- minis are futures contracts tied to the S&P 500 Index.


Taylor, a Florida resident, was a vice president and trader on the Capital Structure Franchise Trading desk, according to the CFTC complaint.


The suit seeks a penalty of $130,000 or triple Taylor’s monetary gain for each violation, whichever is higher.

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