US District Judge William H. Pauley sentenced former Goldman Sachs Group Inc Matthew Taylor to a prison term of nine months for hiding an unauthorized USD 8.3 billion trading position in 2007 which later cost the bank a USD 118 million loss, Bloomberg reported. Taylor was also ordered to repay Goldman Sachs the USD 118 million loss, saying that the lender was a victim and deserved restitution.
Pauley also criticized both the prosecutors and Goldman Sachs about their actions on the case. He scolded the prosecutors for waiting over five years to file the case He also reprimanded Goldman Sachs for its failure to inform rival bank Morgan Stanley of what Taylor did when he worked there. He also remarked that US prosecutors deliberately lower the bank's losses so that Taylor would get lesser jail time under the guidelines of federal sentencing.
Pauley said, "This case presents a paradigm of everything that is wrong with Wall Street and the regulators who are charged with protecting the public. Goldman was silent about Taylor's lies to his superiors that he had lost $118 million. Astonishingly, Goldman then watched as one of its competitors re-hired Taylor. So much for Goldman's concerns about the integrity of the markets."
In April, Taylor pleaded guilty to one account of wire fraud. He said in court that he took the position in order to bolster his standing at the bank and his bonus. In a letter, he told the judge, "I had worked so hard for my job at Goldman and was facing failure. I was so scared of losing the success that at the time I valued so dearly."
According to prosecutors, Taylor undertook the unauthorized trades to make up for the losses incurred in his trading account the month before. The prosecutors added that in 2007, Taylor received a salary of USD 150,000 and was expecting a bonus of USD 1.6 million.
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