Goldman Sachs fined for failing dark pool customers

Tim Wallace
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Goldman Sachs was yesterday fined $800,000 (£466,200) after investors using its dark pool trading platform received a deal on their transactions.

Hundreds of thousands of trades over an eight-day period in 2011 were processed at a price which was not the best on offer, meaning customers lost out, the Financial Industry Regulatory Authority (FINRA) said.

The bank did not have proper controls in place on the Sigma-X dark pool from July 2008 to August 2011. The 395,000 affected trades took place in the eight days to 9 August 2011.

Goldman Sachs did not accept or deny the claims in the settlement, and declined to comment on the payment.

Dark pools are private trading exchanges where limited amounts of information are made available.

The fine comes days after Barclays was accused in the US of hiding crucial information from dark pool clients. It is alleged the bank promised that few predatory high frequency traders were operating in its dark pool while in fact promoting the service to such traders. Barclays is investigating the claims and has not decided how to respond to the case.

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