A former Goldman Sachs trader has been charged by US regulators with bypassing 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 plan was designed to conceal an $8.3 billion futures position and cost the bank $118.44 million, says the CFTC, which is seeking civil monetary penalties, and trading and registration bans.
The CFTC has not named Goldman as Taylor's employer but, according to Reuters, Financial Industry Regulatory Authority records show that the bank fired him in December 2007 for "alleged conduct related to inappropriately large proprietary futures positions in a firm trading account".