(Reuters) - Goldman Sachs Group Inc (GS.N) 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.(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