Goldman Sachs faces losses over technical glitch
The bank’s trading system sent expressions of interest as orders to stock exchanges.
A technical glitch at Goldman Sachs on Tuesday interrupted trading across several US exchanges, which may cost the American investment bank more than $100m.
The exact losses from the problem can be obtained only after the review of each transaction.
The glitch in the electronic trading system, which tracks how the firm prices options for its clients, lasted for about 17 minutes.
Goldman’s trading system sent expressions of interest as orders to exchanges operated by NYSE Euronext, Nasdaq OMX, and CBOE in the initial hours of the US trading on Tuesday, reported the Financial Times citing the bank’s familiar person.
As per the transactions, orders sent carried prices not similar to market prices for options linked to exchange-traded funds and stocks.
Chip Hendon, senior fund manager at Huntington Asset Management, told Bloomberg: “This unfortunately was an error, and in the financial world an error can be a million-dollar error.”
Goldman in a statement said: “The exchanges are working to resolve the issue. Neither the risk nor the potential loss is material to the financial condition of the firm.”
Meanwhile, NYSE said it was yet to complete the trade reviews. Exchange operators CBOE Holdings, Nasdaq OMX, and Amex are also reviewing the transactions.
Last year, a technical issue at Knight Capital cost the firm losses of $461m besides a ban from trading. Earlier in April, Chicago Board Options Exchange was closed for more than three hours due to a technical issue.