Finra ordered Goldman Sachs to pay $3 million for mislabeling tens of millions of short-sale orders as long and filling them at a lower price than could have been obtained.
The Financial Industry Regulatory Authority Inc. said that from October 2015 to April 2018, Goldman mismarked as “long” approximately 60 million short sales orders and executing nearly eight million of the sales, which involved more than a billion shares.
“Due to the inaccurate ‘long’ mark, 12,335 of the executed orders were executed at or below the national best bid while a short sale circuit breaker was in effect,” Finra stated in a letter of acceptance, waiver and consent Tuesday. “These mismarked orders also caused the firm to submit inaccurate trade reports to Finra and maintain inaccurate books and records.”
Goldman filed more than two million inaccurate trade reports to Finra, the broker-dealer self-regulator. It also failed to establish and maintain a supervisory system to ensure proper trade reporting, Finra said.
In September 2019, Goldman reformed its trading system to detect and prevent the routing of inaccurately marked short-sale orders, the agreement letter states.
Goldman did not admit or deny Finra’s findings. The firm agreed to a censure and the $3 million fine. A Goldman spokesperson declined to comment.
Finra’s disciplinary action was another targeting a best-execution failure by a member firm.
Goldman’s mismarked short-sale orders, which were sent to an alternative trading system, were auto-generated to hedge its synthetic risk exposure resulting from equity swap transactions with clients. But the firm failed to include a line of software code that would have properly marked a sell order as “long” or “short,” Finra said.
Goldman fixed the coding error in April 2018 after being notified of the snafu by Finra, the letter states.
In a separate problem, Goldman mismarked sell orders from a foreign affiliate that caused them to be inaccurately labeled as “short.” Goldman corrected the error in October 2019.
Meanwhile, a Minnesota-based advisor from Edward Jones has found a new home within Osaic.
Meanwhile, Carson Group extends its acquisition strategy with a Maryland-based advisory practice.
Financial advisor Craig Robson shares the lessons he learned after leaving Merrill Lynch to set up his own practice in the fourth installment of InvestmentNews' new 'Independence Stories' series.
With an aging advisor population, report looks at demographics, structures.
Formerly Fidelity Investments leader will drive move to comprehensive services.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
