A rogue trader has pleaded guilty to defrauding Wall Street giant Goldman Sachs with unauthorised trades totalling $8.3bn (£5.5bn).
Matthew Taylor admitted that he exceeded internal risk limits and lied to Goldman supervisors to cover up his activities involving futures trade in 2007.
Taylor, 34, pleaded guilty to one count of wire fraud in a United States federal court in lower Manhattan after voluntarily turning himself in to authorities.
The Massachusetts Institute of Technology graduate pleaded guilty some four months after the Commodities Futures Trading Commission (CFTC) filed a civil complaint against him.
The CFTC accused Taylor of fabricating trades to conceal a huge, unauthorised position in e-mini Standard & Poor's futures contracts, which bet on the direction of the S&P 500 index.
The court heard that Taylor's trading position at the firm exceeded risk guidelines set by his supervisors "on the order of 10 times."
He also admitted to making false statements to Goldman Sachs personnel who questioned him about the position.
In total, Taylor's actions led to a $118m (£78m) monetary loss for Goldman Sachs.
"I am truly sorry," he told the court.
Taylor outside court in Manhattan on April 3 Taylor, who joined Goldman in 2005, worked in a 10-person group called the Capital Structure Franchise Trading (CSFT), and was responsible for equity derivatives trades.
After his trading profits plunged in late 2007, his supervisors told Taylor his bonus was going to be cut and instructed him to reduce risk-taking.
Instead he "amassed a position that far exceeded all trading and risk limits set by Goldman Sachs, not only for individual traders ... but for the entire CSFT desk," court documents said.
He subsequently attempted to hide his actions by putting false information into a manual entry system.
When supervisors and other employees confronted him about discrepancies compared with his actual positions, Taylor repeatedly lied, the court heard.
Taylor said he covertly built the position in an effort to restore his reputation and increase his bonus.
At the time he earned a $150,000 (£100,000) salary and expected a bonus of $1.6m (£1m).
Prosecutors are seeking a prison sentence of 33 to 41 months and a fine of up to $75,000 (£50,000), based on his remuneration and not the actual loss suffered by the bank.
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