Goldman Places Four on Leave After Options Error, FT ReportsLaura Marcinek
Goldman Sachs Group Inc. placed four senior technology specialists on administrative leave after a programming error caused the investment bank to send faulty stock-options orders last week, the Financial Times reported.
The newspaper cited a person familiar with the events and didn’t disclose the names of the four employees. Michael DuVally, a spokesman for New York-based Goldman Sachs, declined to comment on the FT report yesterday.
An internal system that Goldman Sachs uses to help prepare to meet market demand for equity options inadvertently produced orders with inaccurate price limits and sent them to exchanges, a person familiar with the situation told Bloomberg News after the Aug. 20 mishap.
The malfunction caused unintended options orders to flood U.S. exchanges, roiling markets and shaking confidence in electronic-trading infrastructure. Two days later, Nasdaq OMX Group Inc. halted trading for three hours after an unrelated failure left some investors without stock quotes. Last year, Knight Capital Group Inc. almost went out of business after the firm flooded U.S. equity markets with erroneous orders.
Most of last week’s faulty options trades have been canceled, a person with direct knowledge of the matter told Bloomberg News, a decision that will limit losses for Goldman Sachs. The bank, the fifth-biggest in the U.S. by assets, stands to lose tens of millions of dollars, the FT reported, without disclosing how it got the information.
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