logo
Share SHARE
FONT-SIZE Plus   Neg

Goldman Sachs To Pay $1.5 Mln For Supervision Failures

The U.S. Commodity Futures Trading Commission or CFTC announced that Goldman, Sachs & Co. (GS) would pay $1.5 million in civil monetary penalty to settle CFTC charges for failing to supervise a former trader, Matthew Marshall Taylor, in late 2007. The CFTC Order also requires Goldman to cease and desist from violating a CFTC regulation requiring diligent supervision.

Goldman failed to supervise diligently the trading activities of Taylor, whose trading activities on seven days in mid-November and mid-December 2007 in the e-mini S&P 500 futures contract.

CFTC filed an enforcement action in the Federal District Court against Taylor on November 8, charging Taylor with defrauding Goldman by intentionally concealing an $8.3 billion trading position in 2007. Goldman suffered a loss of over $118 million in unwinding Taylor's position, CFTC stated.

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.

CFTC Commissioner Bart Chilton said he thought Goldman's fine should have been at least $7.8 million. "I do not believe that the $1.5 million penalty is anywhere close to an amount representing a sufficient penalty or deterrent", Chilton stated. Fines should represent more than a "slap on the wrist" or a "cost of doing business", he added.

"Given the egregious nature of the failure to supervise adequately, combined with the high number of violative transactions, 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," Chilton said in a dissenting opinion.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
AIG reported a plunge in second-quarter profit, hurt by a decline at its insurance business, debt-related losses and lower gains from the sale of investments. However, its earnings topped Street estimates, partly on contribution from aircraft leasing giant AerCap. AIG also announced a boost in dividend and said it would buyback an additional $5 billion stock. Automakers on Monday reported strong U.S. vehicle sales for the month of July, driven by continued demand for trucks and sport-utility vehicles amid an improving economy, lower gas prices and easy availability of credit. Detroit's Big Three - General Motors Co., Ford Motor Co. and FCA US, LLC - all reported vehicle sales above analyst expectations. British lender Lloyds Banking Group Plc. Friday reported higher profit in its first half, benefited by increased net interest income and margin as well as lower impairment. Looking ahead, the company lifted its net interest margin forecast.
comments powered by Disqus
Follow RTT