How One Goldman Sachs Trader Made More Than $100 Million This Year

The gains were the work of Tom Malafronte, a managing director on the bank's high-yield-bond desk in New York. The 34-year-old trader bought billions of dollars in junk corporate debt on the cheap starting in January, then locked in profits as prices recovered, according to people familiar with the matter.

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Goldman also imposes daily risk limits on its traders, who can exceed them under certain market conditions if the firm's executives and risk managers allow it. It is unknown if regulators scrutinized Mr. Malafronte's trades, or if the trades had exceeded his risk limits.

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Mr. Malafronte began by buying bonds issued by Freeport-McMoRan Inc. and Teck Resources Ltd., two mining companies that endured debt-rating downgrades earlier this year. He also snapped up debt issued by retailer Toys "R" Us Inc., Gymboree Corp. and Avon Products Inc., along with a handful of other companies, as investors' appetite for riskier securities nose-dived early in 2016, people familiar with the matter said. Concerns about an economic slowdown in China and the U.S., falling commodities prices and the uncertain direction of interest rates were roiling global markets.

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On certain days in that period, Mr. Malafronte accounted for more than a third of all trading volume in some bonds, the people said.