Goldman Sachs has conducted an internal review of transactions made by an employee who generated $250m trading junk bonds, finding that they didn’t violate a ban on buying and selling for the bank’s own account, according to people with knowledge of the firm’s actions.
Bloomberg News reports that the bank’s compliance staff pored over Thomas Malafronte’s trades to ensure the company could defend them against regulatory scrutiny, according to two of the people, who asked to remain anonymous discussing the confidential examination.
Malafronte attracted attention last month when news reports said he generated more than $100m earlier this year by trading the debt of junk-rated energy firms and retailers. That prompted questions about whether he complied with the Volcker Rule, part of the 2010 Dodd-Frank Act aimed at preventing banks from wagering money in ways that don’t benefit clients.
Malafronte’s revenue had swelled to about $250m by the start of last month, according to two of the people with knowledge of the matter. That probably positioned him to rank among the most successful traders this year across all major Wall Street banks, according to market observers and staff at rival firms.
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