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New York - A former trader with US banking giant Goldman Sachs has pleaded guilty to wire fraud.
Matthew Marshall Taylor entered the plea Wednesday in federal court in Manhattan.
Taylor admitted he took a trading position 10 times larger than he would have been allowed. He wanted to score profits that would enhance his reputation and boost his bonuses.
The judge who accepted the plea said he was miffed that the government is holding Taylor responsible for only up to $2.5m in losses.
Taylor was arrested on Wednesday on criminal charges of fraud linked to a scheme to hide an $8bn futures bet, officials said.
Matthew Marshall Taylor "was in FBI custody as of early this morning," a source familiar with the government's case told AFP on condition of anonymity.
The federal prosecutor's office in Manhattan said Taylor was due to appear before a judge on the charges "in connection with a scheme to accumulate and conceal an unauthorized $8bn position in a trading account that he managed at Goldman Sachs".
In November, the Commodities Futures Trading Commission filed a civil suit accusing Taylor of defrauding his employer "by intentionally concealing... the true huge size, as well as the risk and potential profits or losses associated".
"On or about December 13 2007, Taylor's scheme culminated in his concealment of an approximately $8.3bn long (S&P 500) e-mini futures position," the watchdog said, alleging that Taylor ended up defrauding Goldman Sachs of $118.4m.
In December last year, the CFTC ordered Goldman Sachs to pay $1.5m in a fine for the actions of its trader, saying "it failed to diligently supervise its employees for several months in late 2007".
