A circular InterContinentalExchange Inc has fined investment bank Goldman Sachs Group, Inc. (NYSE:GS) 25,000 pounds ($40,000) for what it expresses as “disorderly trading of oil”, reported by ICE in a circular on its website dated June 17.
It further stated that an ICE committee that examined the trades found no proof of intentional manipulation of the market; however it considered the breach to be of a solemn nature
Kelly Loeffler, Atlanta-based spokeswoman for IntercontinentalExchange Inc. (ICE), which holds ICE Futures Europe, announced that the company doesn’t spoke on investigations. Joanna Carss, a London-based spokeswoman for Goldman Sachs, stated that she couldn’t comment on the matter immediately.
According to the circular, the penalty price links to “price spikes” on the April 2011 Brent-WTI crude spread that happened on Jan. 28 from 2:26 p.m. U.K. time to 2:31 p.m. The shifts were found to be the result of numerous large market orders made in quick sequence by a Goldman trader.
The spikes were examined and found to be the consequence of a limit order and some large market orders placed in quick succession by a GSF trader,” ICE reported.
The matter was referred to ICE’s Authorization, Rules and Conduct Committee which concluded that the behavior of GSF and its customer to be a clear case of antisocial trading, in that the disturbing price impact of the position of such large orders in close proximity was not taken into account.
The ICE committee considered the performance of Goldman Sachs and its buyers to be an obvious case of disorderly trading, in that the deforming price impact of the placement of such large orders in close proximity was not considered.
According to data from ICE, the spread among the April 2011 agreements lessened to $7.49 a barrel on Jan. 28, having opened at $9.41 a barrel, before closing at $7.87 a barrel.
