Goldman Sachs fined over dark pool pricing

Goldman Sachs has been fined $800,000 by a US regulator for “failing” to ensure that trades in its dark pool took place at the best price.

The regulator said more than 395,000 trades were executed in the bank’s Sigma X dark pool at an inferior price during an eight-day period in 2011.

But it added that Goldman was “unaware” of the issue at the time.

Dark pools are trading operations which allow clients to trade large blocks of shares while keeping prices private.

Under US regulations, dark pools and public exchanges are required to give investors the best price available, regardless of where trades are executed.

The Financial Industry Regulatory Authority alleged that Goldman Sachs “failed to establish, maintain, and enforce written policies and procedures that were reasonably designed” to prevent trades from being executed at inferior prices.

The regulator claimed these trades, which took place between 29 July and 9 August 2011, were caused by slow processing of market data within the bank’s dark pool.

The bank neither admitted nor denied the charges.

Goldman has already paid almost $1.67m to affected clients to compensate them for the trades.

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