Rogue trader gets prison, told to repay Goldman $118 million

Fri Dec 6, 2013 5:57pm EST
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By Joseph Ax

NEW YORK (Reuters) - Former Goldman Sachs Group Inc trader Matthew Taylor was sentenced Friday to serve nine months in prison and pay $118 million in restitution to his former employer after he pleaded guilty to pursuing an unauthorized $8.3 billion futures trade in 2007.

In imposing a sentence well below the 33- to 41-month term the U.S. Department of Justice had recommended, U.S. District Judge William Pauley in New York castigated both Goldman and government authorities for failing to immediately address Taylor's conduct when it occurred.

The case is a "paradigm of everything that is wrong with Wall Street and the regulators charged with protecting the public," Pauley said.

Prosecutors claimed Taylor lied to supervisors and fabricated trades in December 2007 to conceal an $8.3 billion position in Standard & Poor's 500 e-mini futures contracts, which bet on the direction of that index. Goldman fired him shortly thereafter.

The bank had sought the $118 million to cover its losses on the trade, a request the U.S. Department of Justice supported, though it is unlikely that Goldman will collect.

Taylor, a married father of two, has moved to Florida, where he and his wife have started a pool cleaning business.

"We've tried to rebuild our lives far from Wall Street," Taylor, who turns 35 on January 1, told Pauley. He pleaded guilty in April, a day after turning himself in to authorities.

He was previously fined $500,000 by the U.S. Commodity Futures Trading Commission.   Continued...

Former Goldman Sachs trader Matthew Taylor departs Manhattan Federal Court in New York, April 3, 2013. REUTERS/Brendan McDermid