CFTC: Goldman Trader Hit $8.3 BILLION Trading Position, Caused Loss Of More Than $100 Million!!!

zerohedge‏@zerohedge

Goldman fine is from news disclosed a month ago. Here is the official CFTC wristslap [link to cftc.gov] …

8 minzerohedge‏@zerohedge

CFTC: FORMER GOLDMAN EMPLOYEE HID $8.3 BILLION TRADING POSITION Another one?

Thank you very much!!!

OMG, are Goldman and Sachs OK?

Call Dr. Obama!
We need $1 billion in Bailoutine, stat!

The Commodity Futures Trading Commission said in a release that a former Goldman Sachs trader hid an $8.3 billion trading position causing Goldman to lose more than $100 million unwinding the position.

Goldman has been ordered to pay $1.5 million civil penalty to settle the charges for failing to supervise the trader, the release states.

Here's the CFTC's full release:

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Goldman, Sachs & Co. (Goldman), a registered futures commission merchant (FCM) based in New York, N.Y., has been ordered to pay a $1.5 million civil monetary penalty to settle CFTC charges that it failed to diligently supervise its employees for several months in late 2007. The CFTC Order also requires Goldman to cease and desist from violating a CFTC regulation requiring diligent supervision.

According to the CFTC’s Order, for several months, Goldman failed to ensure that certain aspects of its risk management, compliance, and supervision programs comported with its obligations to supervise diligently its business as a Commission registrant. During November and December 2007, Goldman further failed to supervise diligently the trading activities of an associated person and former Goldman trader, Matthew Marshall Taylor, whose trading activities on seven days in mid-November and mid-December 2007 in the e-mini S&P 500 futures contract traded on the Chicago Mercantile Exchange’s (CME) Globex platform resulted in a substantial loss to Goldman.

Specifically, in violation of Commission Regulation 166.3, 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, which aggregated manually entered and electronically executed trades in the same product. As a result, on seven trading days in November and December 2007, Taylor circumvented Goldman’s risk management, compliance, and supervision systems, by entering fabricated e-mini S&P 500 sell trades into its manual trading system, which artificially offset and thereby camouflaged e-mini S&P 500 buy trades Taylor had executed in the market. In particular, Taylor established an $8.3 billion e-mini S&P 500 position in a Goldman trading account on December 13, 2007. Goldman suffered a loss of over $118 million in unwinding Taylor’s position.

Separately, the Order states that after Taylor was discharged, Goldman orally notified the CME and the Financial Industry Regulatory Authority (FINRA). Goldman’s ensuing regulatory filings with the National Futures Association (NFA) and FINRA stated that Taylor had been accused of “violating investment-related statutes, regulations, rules, or industry standards of conduct” for “conduct related to inappropriately large proprietary futures positions in a firm trading account.” Thereafter, in response to FINRA’s follow-up inquiries, Goldman provided additional important information only to FINRA, i.e., that Taylor attempted to conceal his trading via fabricated trades. Goldman never provided that additional important information to the NFA or the Commission until after the CFTC’s Division of Enforcement commenced the investigation leading to today’s settlement.

The Order states that Goldman has represented in its settlement offer that it has made changes in light of the events discussed in the Order, including implementing written enhancements to its U.S. futures-related trading and risk management controls and supervision policies and procedures. Goldman has also undertaken to implement a written procedure to enhance its provision of information to the NFA and the Commission about misconduct or alleged misconduct of terminated Goldman employees that relates to trading on a Commission-regulated market to ensure that termination notifications of associated persons, including follow-up disclosures, are provided to the NFA and the Commission.

On November 8, 2012, in a related action, the CFTC filed an enforcement action in the Federal District Court for the Southern District of New York, charging Taylor with defrauding Goldman by intentionally concealing from Goldman the true size, as well as the risk and potential profits or losses associated with the S&P e-mini futures contracts positions traded by Taylor in the Goldman account (see CFTC Press Release 6409-12, November 8, 2012 under Related Links).

CFTC staff members responsible for this case are Janine Gargiulo, Trevor Kokal, Judith Slowly, David Acevedo, Lenel Hickson, Stephen Obie, and Vincent McGonagle.


Read more: [link to www.businessinsider.com]

Oh, I bet they'll be fine...

They only made 20 to 30 Billion looting Greece...

A couple of trillion looting the rest of the world...

From 2007- sure took them long enough to get shit settled!

It's all a fucking scam. Pardon me, it's payday, I need to buy 10 silver maples.

Poor Goldman lost 118 millions.

Oh thank Gold! I mean, God!

OP, change title from "Hit" to "Hid".

They bought a gold mine worth 15.4 billion for a whole 11 million in Chalkidiki here in Greece in 2004, part of the swap deal. One of the biggest scandals of the past decade.

Last Edited by insertfunnyusername on 12/07/2012 03:16 PM

Pinned why?

they can lose trillions it won't matter..the bill would be given to the TAXPAYERS anyway..dumb sheep

..& yet only a handful of "Ignorant Hippies" turned out to stop them.?

A million dollar fine for causing 100 million dollars in what Sach's probably already held in short positions anyway & by simply tossing one trader under the bus.

Goldman's ends up with 8.3 billion back on the books.. with a revolving door at the Fed they can now borrow 10 to 1 against the new legitimate position.

It cost them one million dollars to create an 80 billion dollar position.. rinse, spit & repeat as required.

Want the insanity to stop.. Hang one CEO from a short rope in front of the NYSE. Call the janitor at Goldman's and let him pick which one goes first.

SEC: You committed a crime. By concealing your loses somebody got screwed. Might have been a rich person. Might have been some grandma who sells 20 shares of her retirement once per year to cover her prescriptions.

IBanker: I am sorry.

SEC: We estimate the aggregate negative impact to be $80 Billion. Your fine is $100 Million.

IBanker's Boss calls the FED/ECB: I need $110 Million.

FED/ECB: We know all about it. Whats the extra ten spot for?

IBankers Boss: Well we certainly cant send this guy away with nothing!

FED/ECB: Oh, of course.

IBanker to SEC: Here is the $100 Million. They fired me. Do you want my job?

No worry - the trader will still get his bonus...

Of those who are? I found $100 Million on the street last night.

Somebody fiddled when they should have faddled.

More bullshit being ladled to the sheeple so they think the CFTC actually does something other than help TPTB-owned entities like Goldman and J.P. Morgan fleece them (pun intended) on a daily basis. News brief: The CFTC is not and never will be investigating the massively-concentrated gold and silver naked short positions of the big boys. Their job is to aid and abet the criminals, not expose them.

Good! Hopefully some people who were retail won because of that. Remember, trading is a zero sum game. For every loser there is a winner. Just because he lost someone who was short won. I get wood every time a huge investment firm loses money. Puts more money out there for retail to grab. The market is rigged as it is. The more they lose, the better I feel.

Flawless.

I think that's exactly how the statute is written.

I get the impression that city traders are no better than crack whores and just addicted to gambling other peoples money. Take that away from them and they'll probably happily suck a donkey's dick in exchange for their next fix.

...croaked Dracula's faithful retainer, bitterly..., shuddering as he contemplated the imminent disintegration into dust of his demonic master.

Unfortunately 100 M does not represent the imminent disintegration of Goldman.

Credit is belief.
And there it all goes,
Down the plughole.

I certainly agree that £100, 000, 000 is a mere fig-leaf in the finagling financial forest; the point is, the obvious putrescence loathsomeness of the diseased member of the NYSE when said fig-leaf is snatched away.