Goldman Sachs pays $7 million SEC fine for erroneous options trades
The Securities and Exchange Commission (SEC) has confirmed that Goldman Sachs has paid a $7mn fine for erroneously sending around 16,000 options orders over less than an hour all mis-priced at $1, due to a lack of controls over the introduction of a new computer functionality.
For a Wall Street bank that prides itself on not making mistakes, an incident when Goldman Sachs erroneously sent thousands of stock options trades into the market two summers ago was embarrassing and costly.

Now Goldman is paying a $7 million penalty to the Securities and Exchange Commission to settle civil administrative charges that it did not maintain adequate safeguards to prevent the trading mistake from occurring.

The agency, in announcing the settlement on Tuesday, said the erroneous trading that took place in early morning hours of Aug. 20, 2013 highlighted the need for Wall Street firms to maintain better systems to prevent technological glitches that can roil markets.

The trading glitch, during which Goldman sent out 16,000 mispriced options orders to various exchanges before the official start of the trading day, ultimately cost the firm $38 million in losses, according the settlement order.