The U.S. Commodity and Futures Trading Commission (CFTC) brought charges on Thursday against an ex-Goldman Sachs trader who they allege defrauded the bank of almost $120 million. The suit claims the former Goldman trader manually invented fake trades.
The CFTC’s case claims that Matthew Marshall Taylor attempted to hide an $8.3 billion position in futures in a scam that cost $118 million. The CFTC is seeking a $130,000 penalty against Taylor. Marshall was the former vice president of the Capital Structure Franchise Trading desk for Goldman. Upon his firing from Goldman, Taylor apparently worked for Morgan Stanley.
“Taylor’s fabricated trades had the effect of concealing and misrepresenting the size of his e-mini futures position within his employer’s internal systems,” the report said.
A Goldman Sachs reporter confirmed to Reuters that customer funds at Goldman were unaffected by the fraud.
“The trader provided false explanations when confronted about irregularities we detected in his account during the December 14, 2007 trading day,” said Goldman spokeswoman Tiffany Galvin.
The U.S. Commodity and Futures Trading Commission (CFTC) has been sued by CME Group over the swap reporting rules it passed in the wake of the Dodd-Frank Act.
The lawsuit, filed Thursday in Washington D.C., is only the third of its kind brought against the CFTC in its history. CME requested an injunction that would halt the CFTC from bringing swap reporting rules into effect on November 13.
The suit challenges a CFTC requirement that mandates the release of non-public reports of cleared swaps trades to swap data repositories (SDRs). These SDRS then provide the transaction information to the CFTC.
“CME incurs substantial costs in terms of time, personnel, technological infrastructure, and money to maintain these data in the ordinary course of business,” attorneys for CME said. Read more. And more.