Posted: Dec 6, 2013 4:11 PM
Updated: Dec 6, 2013 4:13 PM
NEW YORK (AP) A former Goldman Sachs trader was sentenced to nine months in prison for wire fraud Friday by a Manhattan judge who took sharp aim at both Goldman and the government, questioning why it took them so long to bring the misconduct to light.
Matthew Taylor had admitted in a guilty plea this year that he concealed an unauthorized $8.3 billion trading position in 2007. He told Goldman within 36 hours but escaped criminal charges until this year.
"Goldman was silent about Taylor's lies," U.S. District Judge William Pauley said in federal court in Manhattan.
The investment banking firm fired Taylor but didn't disclose the full extent of his misconduct, clearing the way for him to continue as a trader for Morgan Stanley for another four years, the judge said.
"So much for Goldman's concerns about the credibility of the financial markets," he said.
Pauley also suggested the U.S. attorney's office in Manhattan and federal regulators went after the rogue trader years after his offense largely for publicity. He accused prosecutors of crafting an artificially low sentencing recommendation to secure a quick plea deal.
"Everything about this case is sad," Pauley said. "Your employer's response was sad. Your conduct was sad. The government's conduct it's sad."
The judge said that by his own calculations of sentencing guidelines, Taylor could have received several years behind bars for making Goldman Sachs suffer a $118 million loss. But too much time had passed for that to make sense, he added.
"Justice has to be swift to mean anything," he said.
Along with the nine-month prison term, Pauley ordered the MIT graduate to complete 400 hours of community service by tutoring children from low-income families in math.
A Goldman spokesman responded Friday by insisting that it had filed timely paperwork reporting that Taylor was fired for "inappropriately large proprietary futures positions in a firm trading account."
There was no immediate response from the U.S. attorney's office.
Taylor, 35, of West Palm Beach, Fla., has said he accumulated and concealed the massive trading position to enhance his reputation within Goldman and secure a bigger bonus. On Friday, he told the judge he was trying to set his life straight by starting a small pool-cleaning company to support his wife and two young children.
"I can't undo what happened. ... but I do offer a very sincere apology," he said.
Taylor will remain out on bail until early February when he was ordered to begin his sentence.
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