ERROR REALLY ‘SACHS’

$7M SEC bank fine

To err is human — and Goldman Sachs will get fined for it.

Lloyd Blankfein’s investmentbanking giant agreed Tuesday to pay a $7 million regulatory fine to settle an accusation that “human error” at the firm caused a 2013 marketshaking incident in which a Goldman computer system sent out wrong options prices to investors.

Goldman’s total loss from sending out 16,000 erroneous trades, including the fine, rose to $45 million — though it could have been as high as $500 million if the exchanges hadn’t agreed to cancel “clearly erroneous” orders, according to the Securities and Exchange Commission, which detailed the trading glitch in court papers settling the charges.

The bank’s error was a scary flashback for the markets, which saw highfrequency trading firm Knight Capital implode a year earlier, in 2012, in the wake of its $450 million trading glitch.

Knight collapsed into the arms of Jefferies Group.

Goldman’s glitch started before trading hours on Aug. 20, 2013, when the bank’s trading system, called Sigma Options, wrongly priced thousands of stock options at $1, according to the SEC.

While the system had safeguards to keep the prices from being disseminated, an unnamed Goldman employee lifted the socalled circuit breakers that would have contained the mistakes.

Further, the company’s policies “were not disseminated to or fully understood by the employees,” the SEC order said.

After the incident, four employees were put on leave. The unnamed Goldman employee who overrode the circuit breakers has been sacked, and the others have left the bank, according to a bank insider.

“Goldman’s control environment was deficient in several ways, significantly disrupted the markets, and failed to meet the standard required of brokerdealers under the market access rule,” Andrew Ceresney, the SEC’s director of enforcement, said in a statement.

“We’re pleased to have concluded this settlement with the SEC,” Tiffany Galvin, a spokeswoman for the bank, told The Post. “Since the incident, we have reviewed and further strengthened our controls and procedures.”

The bank has neither admitted nor denied any wrongdoing.