According to FINRA, Goldman Sachs & Co. LLC was fined a total of $3,000,000 for erroneously marking and routing certain sell orders. The firm mismarked approximately 60 million short sell orders as long, of which nearly 27 million were sent to an alternative trading system.

The mismarked orders were caused by a software implementation error. When upgrading automated trading software intended to hedge the firm's Synthetic Product Group's risk exposure, Goldman inadvertently failed to include a single line of code. This code was designed to copy the long or short mark from a parent sell order to instantaneously created child sell orders. While parent orders were accurately marked as short sales with proper locates obtained, the child orders did not receive the short sale order mark due to the missing code line.

Additionally, the firm misapplied order marking logic to sell orders routed by a foreign affiliate, resulting in certain orders being inaccurately marked short. The firm's supervisory system failed to adequately monitor order marking accuracy. Although Goldman had a surveillance report for order marks, it only reviewed parent orders and failed to confirm proper marking carried over to child orders. This deficiency resulted in the firm failing to detect these errors for approximately 29 months and led to over two million inaccurate trade reports and over seven million inaccurate order memoranda.

This case demonstrates how even sophisticated firms can experience significant compliance failures due to technological errors. Investors should be aware that proper order marking is essential for market transparency and preventing manipulative trading practices. The substantial fine reflects the seriousness of these violations and the importance of robust surveillance systems.