[ by Larry Goldfarb ]

Goldman Sachs Group Inc. agreed to pay a $6.75 million fine to 8 U.S. stock-option exchanges to settle allegations it improperly marked trading orders that may have allowed some trades to get executed ahead of others.

• Goldman marked certain options trades, between 2004 and 2010, on behalf of client broker-dealers and market-making firms with improper codes, calling them "customer" orders, a designation that would have given those trades a priority in handling that they shouldn't have gotten. The mismarking also meant some firms avoided paying certain exchange fees charged to market makers

• The exchanges say Goldman failed to adequately respond to various red flags relating to the system coding, some of them raised by its own employees.

• Last month, the Securities and Exchange Commission reached a $5 million settlement with NYSE Euronext, operator of the New York Stock Exchange, over technology that allegedly gave some customers access to trading information before others.

• The settlement also says Goldman failed to maintain supervisory systems and controls relating to order entry from January 2004 to May 2010. It also didn't respond adequately to red flags raised "on several occasions" by its own employees, according to the settlement.  Goldman will enhance its systems for options orders and provide training for employees, according to the settlement.

To read further, see [WSJ, 10/9/2012].