NYSE Euronext and the SEC on Tuesday imposed a fine of $450,000 on Execution & Clearing, L.P. — a unit of Goldman Sachs Group (GS) — for failing between December 2008 to the late January 2009 [MW]: “to timely close out fail-to-deliver positions in stocks, accepting short sale positions that had not been timely closed out without first pre-borrowing the stocks.”
The unit also failed to disclose to some customers that “the unit had open fail-to-deliver positions in some stocks that had not been timely closed out.”
Goldman Sachs Execution & Clearing L.P. “initially responded to the rule by implementing procedures that were inadequate in that they relied too heavily on individuals to perform manual tasks and calculations, without sufficient oversight or verification of accuracy,” the SEC said today.
Goldman’s execution and clearing unit consented to the penalty without admitting or denying the allegations.
Bloomberg: “This was the result of a manual processing error following the changes in Rule 204T closeout requirements in October 2008,” Goldman Sachs spokesman Ed Canaday said in a statement. “There was no financial impact on our clients. We now have improved, automated processes in place to avoid future errors.”
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