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Ex-Goldman Trader Admits to Hiding $8 Billion Position

Matthew Taylor, a former Goldman Sachs Group Inc. (GS) trader, pleaded guilty to concealing an unauthorized $8.3 billion trading position in 2007, causing the bank to lose $118 million.

Under an agreement with the government, Taylor, 34, pleaded guilty to a single count of wire fraud yesterday before U.S. District Judge William H. Pauley in Manhattan federal court. He told the judge he took the position to boost his standing, and his bonus, at Goldman Sachs.

Reading from a prepared statement, Taylor told Pauley that on Dec. 13, 2007, he accumulated a position 10 times the amount he was allowed to take in futures contracts tied to the Standard & Poor’s 500 Index (SPX). He said he made false entries in a manual trading system to hide the position on the CME Globex electronic-trading platform used by Goldman Sachs. He said he lied when questioned about the position by other Goldman Sachs employees.

“I accumulated this trading position and concealed it for the purpose of augmenting my reputation at Goldman and increasing my performance-based compensation,” Taylor said. “I am truly sorry.”

Before accepting the guilty plea, Pauley questioned a provision in the agreement stipulating that the loss, for sentencing purposes, was the $1 million to $2.5 million Taylor hoped to win in bonuses from the trades, instead of the $118 million loss suffered by Goldman Sachs.

Maximum Term…”

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