Sunday, July 12, 2009

NYSE Error Keeps Goldman Off Weekly Program-Trading List

NEW YORK -- An error by the New York Stock Exchange caused Goldman Sachs Group Inc. to be left out of the exchange's weekly program trading data last week.

Goldman Sachs is regularly near the top of the NYSE's list, if not at the top. In the weekly report released last Thursday, however, even when program trading amounted to an all-time high of 48.6% of NYSE average daily volume, Goldman was absent from the NYSE's list.

"It was an error on our part in the program trading report. The program trading report will be revised with a corrected version coming out later this week," said Ray Pellecchia, a spokesman for NYSE Euronext.

Mr. Pellecchia noted the firm will re-run all of the information compiled from its member firms, with both the rankings and total percentage likely to be changed. But given the annual reconstitution of Russell Indexes, the total% of program trading's reach is likely to remain a record, say program trading experts.

NYSE, a unit of NYSE Euronext, publishes figures on program trading -- the act of using computer models to engage in purchases or sales -- of its member firms once a week. Program trading has picked up significantly this year as high-frequency trading desks have grown.

The absence of Goldman Sachs on NYSE's weekly list raised eyebrows. Speculation surrounding the matter increased over the weekend after the U.S. Justice Department arrested a former Goldman Sachs employee and charged him with stealing computer codes related to the firm's high-speed trading platform.

Reuters, which broke the news of Sergey Aleynikov's arrest and criminal charges, said Sunday in a column that Goldman may have "asked the NYSE to alter some of its reporting methodology after the firm discovered that someone may have infiltrated the proprietary computer codes it uses."

Representatives for both Goldman Sachs and NYSE on Monday denied the speculation, with Goldman noting it had submitted weekly data just as it always does and was surprised not to be on NYSE's list.

"According to the data Goldman Sachs submitted, we are certain we were among the top firms in terms of program trading volume for the week ended June 26," said Michael DuVally, a spokesman for the Wall Street firm.

The faulty weekly program trading report is the latest in a string of snafus for the NYSE over the past week.

Mr. Pellecchia noted the NYSE error is in no way connected with a connectivity problem on Thursday that forced the exchange to extend the U.S. equity markets close to 4:15 p.m. EDT. Nor was it tied to the technical issues that caused an erroneous notice of suspension and delisting for American International Group Inc. that was posted on the Web site of the NYSE for three hours Wednesday.

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