The Washington Post

Former Goldman Sachs trader pleads guilty to fraud; private employment slips in March

financial fraud
Ex-Goldman worker admits hiding trades

A former Goldman Sachs trader pleaded guilty to wire fraud Wednesday, admitting that he caused his company to lose $118 million in 2007 when he put $8 billion at risk.

Matthew Marshall Taylor, 34, said he took the position on a futures contract traded electronically through the Chicago Mercantile Exchange in December 2007 to enhance his reputation and boost his earnings in a year when he made $150,000 in salary and $1.6 million in bonuses. At the time, he was working at Goldman Sachs in Manhattan.

According to court papers filed in Manhattan, Taylor entered fictitious information in trading account records and lied to company representatives to cover up the fact that he had put 10 times more money at risk in the trade than he was allowed. He claimed that the $8 billion at risk was actually only $65 million, the papers said.

— Associated Press

Hiring is weaker
at private companies

Companies hired at the weakest pace in five months in March as recent strong demand for construction jobs evaporated and growth in the vast services sector slowed, signs that the economic recovery could be hitting a soft patch.

The ADP National Employment Report said Wednesday that private employers added 158,000 jobs last month, falling short of economists’ expectations for 200,000 new jobs. The gain was the smallest since October.

A separate report on the health of the services sector, which dominates the economy, also showed that employment growth pulled back in March, stirring concerns that the government’s closely watched monthly labor-market report due out Friday could miss expectations.

Upbeat data in recent months have suggested the economy picked up in the first quarter after growing at a weak 0.4 percent rate in the fourth quarter of last year. But Wednesday’s reports suggested that the first quarter may have ended on a softer note. Economists said the slowdown in those areas could lay the foundation for weaker growth in the current quarter.

— Reuters

Also in Business

l  J.C. Penney chief executive Ron Johnson, who is struggling to overhaul the department-store company, had his total compensation cut to $1.89 million last year. Johnson, 54, received $1.5 million in salary and $344,000 for personal use of the corporate aircraft, according to a filing. The former Apple retail chief was awarded $53.3 million in salary, bonus, stock awards and other compensation in 2011, when he became the retailer’s head.

l  A U.S. appeals court revived a lawsuit by the former wife of Steven A. Cohen, founder of hedge fund SAC Capital Advisors, who accused the billionaire of hiding $5.5 million from her during proceedings that led to their 1990 divorce. The U.S. Court of Appeals for the 2nd Circuit in New York said a lower court had erred in dismissing fraud-based claims by Patricia Cohen, who had sued her ex-husband in 2009. Writing for a three-judge panel, Judge Pierre Leval said Patricia Cohen had made a “plausible” allegation that Steven Cohen had concealed the $5.5 million during negotiations on a separation agreement in 1989.

l  South Korean automakers Hyundai and Kia are recalling almost 1.9 million vehicles to fix problems with air bags and brake light switches. The switch recall covers almost 1.7 million vehicles — most of the automakers’ model lineups from the model years 2007 through 2011. In addition, Hyundai is recalling about 194,000 Elantra compacts from 2011 to 2013 to fix an air-bag problem.

l  CVS Caremark agreed to pay $11 million to settle federal claims that its Oklahoma pharmacies violated recordkeeping requirements of the Controlled Substances Act, U.S. Attorney Sanford Coats said Wednesday in Oklahoma City. Some of CVS’s 46 pharmacy retail stores in Oklahoma created false Drug Enforcement Administration registration numbers that were sometimes provided to state prescription drug monitoring programs, according to the claims. CVS said its stores must comply with the recordkeeping requirements, but did not admit liability.

l  British Airways parent IAG said it will buy 18 additional Boeing 787s and possibly more Dreamliners for its Iberia arm once restructuring measures for the Spanish unit take hold. British Airways had previously ordered 24 787s. Dreamliners were grounded Jan. 16 because of battery problems.

l  A federal judge rejected a bid by Wells Fargo to dismiss a lawsuit by investors who said the bank failed in its role as trustee for debt issued by a financing company that collapsed in 2009 in an estimated billion-dollar fraud. A 50-page decision by U.S. District Judge David Carter in Santa Ana, Calif., clears the way for a possible trial against the fourth-largest U.S. bank over its dealings with Capital Holdings.

l  Cameron International was dismissed from all claims arising from BP’s 2010 Gulf of Mexico oil spill after a judge said there was no evidence showing the company was at fault for the disaster. Cameron, which made the “blowout preventer” that was designed to stop explosions in BP’s oil well, was named in multiple lawsuits claiming the equipment was defective. Witnesses testifying at a New Orleans trial over fault for the disaster have said the blowout preventer wasn’t properly maintained by the Transocean crew manning the drill rig.

— From news services

Coming Today

l  8:30 a.m.: Weekly jobless claims released.



Success! Check your inbox for details. You might also like:

Please enter a valid email address

See all newsletters

Show Comments
Most Read



Success! Check your inbox for details.

See all newsletters

Your Three. Video curated for you.

To keep reading, please enter your email address.

You’ll also receive from The Washington Post:
  • A free 6-week digital subscription
  • Our daily newsletter in your inbox

Please enter a valid email address

I have read and agree to the Terms of Service and Privacy Policy.

Please indicate agreement.

Thank you.

Check your inbox. We’ve sent an email explaining how to set up an account and activate your free digital subscription.