CTFC blasted in rogue trader case

Written By Unknown on Sabtu, 07 Desember 2013 | 23.16

A Manhattan federal court judge on Friday blasted regulators for shoddy and slothful oversight of an $8.3 billion rogue trading scandal perpetrated at Goldman Sachs back in 2007.

"One cannot call it justice or sound regulatory oversight when it takes six years to bring a rogue trader to justice," said Judge William Pauley, who noted the person at the center of the scandal, Matthew Taylor, admitted his guilt on Day One.

Once a Wall Street rising star from MIT, Taylor on Friday was sentenced to nine months in prison — far less than the 33 to 41 months the government was seeking.

The 34-year-old pleaded guilty to a single count of wire fraud eight months ago.

Pauley bashed the Commodity Futures Trading Commission for not bringing a case until years after the sophisticated fraud.

Goldman racked up $118 million in losses after trying to unwind the $8.3 billion complex futures trade.

Taylor lied about his trading positions until the giant 2007 trade got too unwieldy to keep hidden from his bosses.

Delivering a scathing indictment of Wall Street watchdogs, Pauley referred to the case as a "paradigm of everything that is wrong with Wall Street and the regulators charged with [protecting] the public."

Pauley even took a swipe at Goldman for failing to completely detail its former employee's malfeasance after firing him.

"Goldman [Sachs] was silent . . . about the fact that [Taylor] had manipulated [its] trading systems," the judge said.

"Astonishingly, Goldman then watched as one of its competitors, Morgan Stanley, rehired Taylor," he added.

Pauley painted the ex-Goldman exec as a "brilliant and talented young man" who was "motivated by avarice" and whose seven-figure salary and Westhampton abode weren't enough.

Taylor also will be required to perform 400 hours of tutoring for disadvantaged children during a three-year supervisory release period.

"I can't undo what happened, but I do offer a very sincere and heartfelt apology," Taylor said, extending an apology to his former Goldman bosses.

The ex-trader launched a Florida pool-cleaning business in an effort to rebuild his tattered reputation and support his wife and two kids.


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