BLBG:Commodity Regulator Says Trader Caused $118 Million Loss
A commodities trader was accused in a lawsuit by U.S. regulators of concealing an $8.3 billion position and causing his employer losses of $118 million.
The trader, Matthew Marshall Taylor, in 2007 fabricated trades in a New York-based futures commission merchant’s internal system and obstructed his employer’s discovery of his position, risk and profits and losses, the U.S. Commodity Futures Trading Commission said in a complaint yesterday in federal court in New York. The employer isn’t identified in the suit.
Taylor’s trades, after the liquidation of his position, caused losses of about $118 million, according to the complaint. The fabricated trades and concealment violated provisions of the Commodity Exchange Act, according to the complaint.
By Dec. 13, 2007, “Taylor’s scheme culminated in his concealment of a notional value of an approximately $8.3 billion long e-mini futures position,” according to the lawsuit. E- minis are futures contracts tied to the S&P 500 Index.
Taylor concealed the position by bypassing the futures commission merchant’s internal system designed for entering and routing trades to the Chicago Mercantile Exchange and manually entering fabricated futures trades in a different internal system maintained by his employer, according to the complaint.
Taylor, who the U.S. Commodity Futures Trading Commission said is a resident of Florida, was a vice president and trader at his employer’s “Capital Structure Franchise Trading” desk, according to the complaint.
The lawsuit seeks a penalty of whichever is higher, $130,000 or triple Taylor’s monetary gain for each violation of the law described in the complaint.
Ross Intelisano, a lawyer for Taylor in New York, didn’t immediately return a call yesterday seeking comment on the complaint.
The case is U.S. Commodity Futures Trading Commission v. Matthew Marshall Taylor, 12-cv-8170, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
