Ex-Goldman trader pleads guilty to wire fraud for bad $8.3B futures trade
After falling short of its quarter two estimates, Goldman Sachs is likely to lay off 1,000 employees by the end of the year.
A former trader at Goldman Sachs pleaded guilty Wednesday to wire fraud for concealing an $8.3 billion futures trade that was ten times larger than allowed by his business unit.
Matthew Taylor, 34, turned himself in and pleaded guilty to a single count of wire fraud for hiding the bad trade that lost the Wall Street bank $118.4 million.
"I am truly sorry," Taylor said at a hearing in Manhattan federal court Wednesday.
Taylor said he knew that it was wrong when he took the $8.3 billion position back in December 2007 but did it anyway to enhance his reputation and boost his personal profits.
According to the Associated Press, Taylor made $150,000 in salary and expected $1.6 million in bonuses that year.
A source familiar with Goldman's equities trading business told Reuters that Taylor's position represented roughly 20 percent of e-mini trading volume on the Chicago Mercantile Exchange the day it was established.
The market moved against Taylor's position, leading to the $118 million loss, the source told Reuters.
Goldman Sachs fired Taylor after the loss but he moved on to a job as an equity derivatives trader with Morgan Stanley.
Goldman Sachs settled with the Commodities Futures Trading Commission for $1.5 million after being accused of not appropriately supervising traders.
"We are very disappointed by Mr. Taylor's unauthorized conduct and betrayal of the firm's trust in him," the bank said in a statement on Wednesday.
If convicted, Taylor faces up to 20 years in prison. Sentencing is set for July 26.
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