A U.S. federal court has fined a former Goldman Sachs trader US$500,000 for concealing his trading positions from his firm, which led to a US$100 million loss for the firm.
The U.S. Commodity Futures Trading Commission (CFTC) announced that Judge Richard Sullivan of the U.S. District Court for the Southern District of New York entered a final judgment and ordered a permanent injunction against Matthew Marshall Taylor for defrauding Goldman, Sachs & Co. in December 2007 by intentionally concealing the true position size, as well as the risk and potential profits or losses associated with the S&P 500 e-mini futures contracts position in his trading account.
The CFTC says that the court’s order finds that Taylor recorded multiple fabricated entries for trades that he never made in order to conceal and understate the true size of his e-mini futures position and risk in his trading account. In doing so, it says that he violated the anti-fraud provisions of the Commodity Exchange Act.
He is ordered to pay a US$500,000 civil monetary penalty, and is permanently banned from trading and registration. In a related criminal proceeding based on substantially the same facts, Taylor pled guilty to one count of wire fraud, the CFTC adds.
Last year, the CFTC fined Goldman US$1.5 million for supervisory failures revealed by the case, which saw it lose $118 million when it unwound the US$8.3 billion position.