After the passing of more than five years, the government charged Matthew Taylor, a former derivatives trader at Goldman Sachs, with fraud. He had, within the span of 36 hours, accumulated an unauthorized $8 billion position in S&P E-mini futures, concealed his position from Goldman Sachs’ risk systems, and lied about it when asked by his supervisors and risk managers. After firing Mr. Taylor, Goldman Sachs lost $118 million unwinding that position.
Notwithstanding the magnitude of loss, Tom Rotko and Chuck Clayman persuaded United States Disrtict Judge William H. Pauley, III to impose only a 9 month sentence. As reported in The New York Times, Tom and Chuck carefully placed Mr. Taylor's conduct in the larger scope of financial industry upheaval of the past half-decade. That framing provided the basis for a sentence significantly below federal guidelines as well as Judge Pauley's finding that Mr. Taylor's case “present[ed] a paradigm of everything that is wrong with Wall Street and the regulators who are charged with protecting the public.”