Goldman Sachs (NYSE:GS) was just fined $3 million by FINRA for making short sales as ‘long’ sales for three years.
“It allowed the firm to short millions of shares while short sale circuit breakers were in effect, over a period of 3 years (3 whole years!!)”, says Genevieve Roch-Decter.
“So Goldman breaks the rules, profits, and then FINRA issues a slap on the wrist fine of $3m, and keeps $1.1m for itself.”
From October 2015 to April 2018, Goldman mismarked around 60 million short sale orders totaling more than 14 billion shares as “long” sales, with nearly eight million of those orders, totaling more than a billion shares, being executed, FINRA said.
FINRA has been under serious heat this year since the halt and delisting of ticker symbol MMTLP.
The mismarked orders were caused by the failure to add a single line of computer code during an upgrade to automated trading software Goldman used to simplify its order flow, FINRA said.
Because they were inaccurately marked as “long,” 12,335 of the executed orders were executed at or below the best displayed price available while a short sale circuit breaker was in effect, FINRA said.
Short sale circuit breakers prohibit the execution or display of a short sale in that security at a price that is less than or equal to the current national best bid.
Goldman Sachs Masked Short Sales for Years
The institution was able to mask short sales for years by reporting short sales as long sales.
How this went on for three years is beyond comprehension.
“The mismarked orders also caused Goldman to submit inaccurate trade reports to FINRA and maintain inaccurate books and records”, FINRA said.
“Goldman also failed to establish and maintain a supervisory system reasonably designed to achieve compliance with short sale regulations SHO and rules relating to accurate trade reporting,” the regulator said.
Goldman accepted and consented to FINRA’s findings without admitting to or denying them.
Source(s): Reuters.
Related: Goldman Sachs Lays Off 3,000 Employees and Cuts Salaries
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About The Author
GS and several other firms should have had their license to trade stocks revoked permanently for repeatedly stealing billions/trillions of dollars from investors by selling fake/ unowned shares to manipulate prices down. The oversight agencies (SEC, FINRA, DOJ…) acted as accessories by failing to put a stop to the corruption and to put the CEO offenders in jail.
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If they were short shares they would have had to cover them, but instead got them for free and added shares to the AMC float.