NEW YORK ( TheStreet) -- The U.S. Commodities Futures Trading Commission ordered Goldman Sachs ( GS - Get Report) to pay a civil monetary penalty of $1.5 million to settle charges that it failed to supervise its employees five years ago.

The charges are in connection with a fraudulent trade in e-mini S&P 500 futures contracts by a former employee Mathew Marshall Taylor in November and December 2007, that resulted in a loss of over $100 million at the investment bank.

According to the order, Goldman "failed to have policies or procedures reasonably designed to detect and prevent the manual entry of fabricated futures trades into its front office systems, which aggregated manually entered and electronically executed trades in the same product."

. For seven days in late November and December 2007, the trader entered fabricated e-mini S&P 500 sell trades into its manual trading system, which artificially offset and camouflaged e-mini S&P 500 buy trades Taylor had executed in the market.

Taylor established an $8.3 billion e-mini S&P 500 position in a Goldman trading account on December 13, 2007. Goldman later suffered a loss of over $118 million in unwinding Taylor's position.

Goldman provided information about the trade violations to CME and FINRA, but did not provide dditional important information to the National Futures Association.

The bank has said in its settlement offer that it has since the event made changes including implementing written enhancements to its U.S. futures-related trading and risk management controls and supervision policies and procedures.

On Nov. 8, CFTC filed an enforcement action in the Federal District Court for the Southern District of New York, charging Taylor with defrauding Goldman "by intentionally concealing from Goldman the true size, as well as the risk and potential profits or losses associated with the S&P e-mini futures contracts positions traded by Taylor in the Goldman account."

-- Written by Shanthi Bharatwaj in New York.

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