Morning Coffee: How a $1.75m, 28 year old Goldman trader was ruined by exuberance in the run-up to Christmas

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At the Go-To bank

While you've been going about your daily life, celebrating family occasions, preparing for Christmas, losing hair, the cogs of justice have been churning for badly behaved ex-Goldman Sachs trader Matt Taylor.

Taylor first came to the world's attention in November 2012, when it emerged that he'd been fired for concealing a giant trading loss at Goldman Sachs, and had promptly gone on to work for Morgan Stanley. In March 2013 Taylor handed himself over to authorities and yesterday prosecutors for the U.S. District Court in Manhattan filed a document stating that Taylor should repay the whole $118m he lost at Goldman Sachs (to Goldman Sachs), and spend three years in prison.

It's a steep price for moments of madness. Taylor's transgression reportedly took place over a two day period in December 2007, when he attempted to conceal an an $8.3bn bet on Standard & Poor's 500 e-mini futures contracts. At the time Taylor was just 28 years old and earning $1.75m a year. He told the court that he built the position to restore his reputation and increase his bonus. Let this be a warning to other young traders who might get carried away in the approach to Christmas.

Separately, the collateralized loan obligation business is booming, with issuance at its highest level since 2007. Where can you ride the CLO wave? Try Moelis & Co. It's setting up a new CLO unit, Steele Creeke Investment Management.


JPMorgan earned £7m advising Co op to acquire Britannia. (Bloomberg)

The eventual outcome of the Britannia deal was to lumber the Coop with billions of pounds of toxic assets that have threatened its very survival and left the once-mutually-owned business in the hands of its bondholders. (Telegraph)

Richard Bateson, who was head of strategy for the firm’s AHL quantitative trading unit, has founded London Quantitative Investments (LQI) alongside ex-Goldman Sachs alumni Jonathan Greenhalgh and former Lehman Brothers banker Patrick Coppens. (CityAm) 

It could cost RBS £1bn to remedy its IT issues. (Guardian)

Profits at Numis are up…445%. (Financial News) 

Traders and brokers are whistleblowing on each other’s dubious activities more often. They sent 1,035 suspicious transaction reports to the City watchdog in the year to August 31, up from 739 in 2012 and 544 the year before that. (The Times)

Hugh Hendry would like to buy Bitcoin. (Investmentweek)

Euribor-related fines are coming. (Businessweek) 

“It’s great that he’s from the trading floor, he really gets the passion…he’s vulnerable and I don’t think people expect that about bankers.” (WSJ)

Six habits of remarkably likeable people. (INC)