04 September 2015

Goldman Sachs fined $1.5m over supervision failures

10 December 2012  |  6578 views  |  0 Goldman Sachs logo web screen shot

Goldman Sachs has been fined $1.5 million by US regulators for failing to supervise a trader who bypassed internal systems to conceal an $8.3 billion position from the bank and defraud it of $118 million.

According to the Commodity Futures Trading Commission (CFTC), in late 2007 Matthew Marshall Taylor, while trading a firm account, entered fake e-mini futures trades into the bank's manual trade entry system to conceal and misrepresent the size of his true position.

Taylor is accused of entering the fabricated trades by bypassing internal system designed for entering and routing electronically to the CME, instead manually putting them in a different internal system that routed only to the firm's books and records, not to the exchange.

The watchdog filed charges against Taylor in Manhattan federal court in November, saying he defrauded the bank, which ended up losing $118.44 million.

Now Goldman has been fined for failing to ensure "risk management, compliance, and supervision programs comported with its obligations to supervise diligently its business as a Commission registrant".

The $1.5 million figure has been criticised by one CFTC commissioner, Bart Chilton, who says that "penalties should be calculated so that they are more than a 'slap on the wrist'".

Comments: (0)

Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board, sign up now.

Related blogs

Create a blog about this story (membership required)

Related stories

09 November, 2012
11 October, 2012
10 August, 2012

Related company news

 

Related company information

Goldman Sachs

Who is commenting?

Finextra Member Commented on: HSBC to rebrand Britsh...
Finextra Member Commented on: Zapp to use behavioura...

Top topics

Most viewed Most shared
Third of Brits expect day-to-day mobile pa...
8428 views comments | 39 tweets | 15 linkedin
Payments UK sets out vision for 'world cla...
6967 views comments | 17 tweets | 10 linkedin
UK boosts contactless limit to £30
5775 views comments | 31 tweets | 20 linkedin
PayPal rolls out personalised URLs for P2P...
5731 views comments | 34 tweets | 19 linkedin
Behold the contactless jacket
5553 views comments | 23 tweets | 18 linkedin

Featured job

£95,000 basic, £170,000 OTE
London

Find your next job