Enter your email address and start getting breaking law firm and legal news right now!
|Free Market Evaluation - Send us your resume and we will give you free feedback|
CFTC Fines Goldman Sachs $1.5 Million View Count: 241
On Friday, the Commodity Futures Trading Commission (CFTC) imposed a fine of $1.5 million on Goldman Sachs to settle charges over its failure to supervise its traders and allowing at least one futures dealer to hide billions and cause a $118 million loss. The 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 neat result was that ex-Goldman trader Matthew Marshall Taylor was able to hide an $8.3 billion position in 2007, by manually entering fake trades. “As a result, on seven trading days in November and December 2007, Taylor circumvented Goldman’s risk management, compliance, and supervision systems,” said the CFTC.
In a lawsuit filed earlier in November, the CFTC has sought a $1, 30,000 penalty against Taylor, who was at the time a vice president at Goldman Sachs’s Capital Structure Franchise Trading desk and later joined Morgan Stanley.
Bart Chilton, a CFTC commissioner criticized the imposed fine as being too low and said, “I believe that the monetary penalty should be significantly higher in order to represent a sufficient punishment, as well as to denote a meaningful deterrent to future illegal activity.”
Though Goldman Sachs took a $118 million loss in trying to set things straight and in unwinding the position in e-mini S&P futures contracts, it said, “Taylor’s activity was flagged by our controls on December 14, with no impact to customer funds … Since these events, we have enhanced our controls. We’re pleased to have settled this matter.”CFTC Fines Goldman Sachs $1.5 Million by Scott