17 July 2018
Visit www.avoka.com

Goldman Sachs fined $800k over dark pool failings

02 July 2014  |  2752 views  |  0 Source: Finra

The Financial Industry Regulatory Authority (Finra) announced today that it has fined Goldman Sachs Execution & Clearing, L.P. $800,000 for failing to have reasonably designed written policies and procedures in place to prevent trade-throughs of protected quotations in NMS stocks from November 2008 through August 2011 in connection with trading in its proprietary alternative trading system, SIGMA-X.

The Order Protection Rule generally requires that trading centers trade at the best-quoted prices or route orders to the trading centers quoting the best prices. FINRA found that from July 29, 2011, through August 9, 2011, there were more than 395,000 transactions executed in SIGMA-X where the execution traded through a protected quotation at a price inferior to the National Best Bid and Offer (NBBO).

During the eight-day trading period, Goldman Sachs was unaware that it was trading through a protected quotation in these instances. The trade-throughs were caused by market data latencies at SIGMA-X and were undetected in a timely manner. FINRA found that from November 2008 through August 2011, Goldman Sachs failed to establish, maintain, and enforce written policies and procedures that were reasonably designed to prevent trade-throughs of protected quotations in NMS stocks; and failed to regularly surveil to ascertain the effectiveness of its policies and procedures designed to prevent trade-throughs of protected quotations in NMS stocks.

In connection with the approximately 395,000 trade-throughs, Goldman Sachs returned $1.67 million to disadvantaged customers.

Thomas Gira, Executive Vice President, FINRA Market Regulation, said, "It is imperative that firms take steps to ensure compliance with the SEC's trade-through rule so that displayed trading interest is appropriately protected and customers do not receive executions at inferior prices. In today's highly automated trading environment, FINRA has no tolerance for firms that fail to have robust policies and procedures to protect against trading through protected quotations."

In settling this matter, Goldman Sachs neither admitted nor denied the charges, but consented to the entry of FINRA's findings. Investors can obtain more information about, and the disciplinary record of, any FINRA-registered broker or brokerage firm by using FINRA's BrokerCheck. FINRA makes BrokerCheck available at no charge. In 2013, members of the public used this service to conduct 16.5 million reviews of broker or firm records. Investors can access BrokerCheck at www.finra.org/brokercheck or by calling (800) 289-9999. Investors may find copies of this disciplinary action as well as other disciplinary documents in FINRA's Disciplinary Actions Online database. 

Comments: (0)

Comment on this story (membership required)

Related company news

 

Related company information

Goldman Sachs

Related blogs

Create a blog about this story (membership required)
Visit http://go.jumio.com/finextraAdVisit info.nice.comVisit https://secure.vasco.com

Top topics

Most viewed Most shared
Handelsbanken trials micro contactless cardsHandelsbanken trials micro contactless car...
10439 views comments | 19 tweets | 30 linkedin
Metro Bank opens developer portalMetro Bank opens developer portal
9419 views comments | 5 tweets | 14 linkedin
Anything Visa can do...Mastercard takes time outAnything Visa can do...Mastercard takes ti...
8783 views comments | 6 tweets | 14 linkedin
Citi to streamline corporate receivables with HighRadiusCiti to streamline corporate receivables w...
7771 views comments | 1 tweets | 5 linkedin
Banks stand to reap $512 billion revenue boost from 'intelligent automation'Banks stand to reap $512 billion revenue b...
7564 views comments | 21 tweets | 30 linkedin

Featured job

Find your next job