BUSINESS

Goldman Sachs Puts 4 Employees On Leave After Trading Glitch: FT

Goldman Sachs Group Inc. signage is displayed on the floor of the New York Stock Exchange in New York, U.S., on Thursday, Jun
Goldman Sachs Group Inc. signage is displayed on the floor of the New York Stock Exchange in New York, U.S., on Thursday, June 2, 2011. U.S. stocks retreated, a day after the biggest slump for the Standard & Poor's 500 Index since August, as investors awaited the Labor Department's monthly report on employment in the world's largest economy. Photographer: Jin Lee/Bloomberg via Getty Images

(Reuters) - Goldman Sachs Group Inc put four senior technology specialists on administrative leave after a trading glitch that led to a flood of erroneous options trades, the Financial Times reported, citing people familiar with the situation.

Last Tuesday, an upgrade of an internal system affected options on stocks and some exchange-traded funds with listing symbols beginning with the letters H through L.

The Financial Times said about 80 percent of the mistaken contracts sent to the New York Stock Exchange were cancelled, limiting losses for Goldman. But the glitch "provoked a strong reaction" within the bank, which takes pride in a reputation for risk management, the paper said.(http://link.reuters.com/jeg62v)

The system, called a "trading axis", monitors the Wall Street bank's inventory to determine whether it should be a more aggressive buyer or seller in the market.

But a technical error misinterpreted non-binding indications of interest, or IOIs, as firm bids and offers, leading to some trades that were vastly out of line with where market prices were, Reuters reported previously, citing a source familiar with the matter.

Goldman Sachs was not available for comment outside of regular business hours.

(Reporting by Krithika Krishnamurthy in Bangalore; Editing by Chris Gallagher)

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