WASHINGTON:Goldman Sachs Group Inc was fined $1.5m to settle charges it failed to supervise its traders and allowing one futures dealer to hide billions in dollars from sight and causing a $118m loss.
Ex-Goldman trader Matthew Marshall Taylor in 2007 camouflaged an $8.3bn position, manually entering fake trades, the Commodity Futures Trading Commission (CFTC) said.
“Goldman failed to have policies or procedures reasonably designed to detect and prevent the manual entry of fabricated futures trades into its front office systems,” the top US derivatives regulator said.
“As a result, on seven trading days in November and December 2007, Taylor circumvented Goldman’s risk management, compliance, and supervision systems,” the CFTC said.
In a lawsuit in New York in November, the CFTC sought a $130,000 civil penalty against Taylor, who at the time was a vice president at the bank’s Capital Structure Franchise Trading desk, and later went to work for Morgan Stanley.
Goldman Sachs took a $118m loss in unwinding the position in e-mini S&P 500 futures contracts.
Reuters
