The Financial Industry Regulatory Authority has fined Goldman Sachs over its mistakes in marking millions of stock orders, reports Financial Advisor.
FINRA levied a fine of $3 million and censured the New York-based firm for the errors that involved about 60 million short sale orders. The authority said Goldman Sachs mismarked those orders as long instead of short during the period from 2015 to 2018.
According to FINRA, this resulted in “the execution of 12,355 short sale transactions for 1,596,375 shares at or below the national best bid while a short sale circuit breaker was in effect. It also resulted in Goldman submitting over two million inaccurate trade reports to FINRA and creating and maintaining over seven million inaccurate order memoranda.”
FINRA said the mistakes also were a violation of the authority’s rules involving filing accurate trade reports and maintaining accurate order memoranda.
The mismarked orders were caused by the failure to add a single line of computer code during an upgrade to automated trading software Goldman used to simplify its order flow, FINRA said. The issue was discovered when FINRA was examining how Goldman Sachs executed its orders. The coding error was corrected by the firm after it was pointed out by FINRA in April 2018.
In FINRA’s letter of acceptance, waiver and consent, Goldman Sachs agreed to the penalties without admitting or denying the allegations.
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