Here is another case,where a positive testing results could at times leads to penalty.It’s a classic case where in program submits a very large number of orders probably due to the some looping condition often implemented in the codes(Again this is my guess).I have seen this issue in some of program which I wrote.Rather than inserting one row of data I inserted around 3 rows of data and which in all resulted in 6 rows of data in front end.All these types of errors are very hard to identify because they disguise themselves as regular requirement.Only people with deep expertise in the domain and with strong technical skillsets can identify where the issue lies.I often say in software world, one error can have many causes and they have all related closely to each other.
Below is media extract for coding error,
Morgan Stanley International has been fined APS35,000 by NASDAQ OMX Stockholm after a coding error in its algorithm software caused unusual volatility in the market on 30th November last year.
The glitch resulted in Morgan Stanley accidentally submitting a large number of orders and executed a very large number of trades in a group of Stockholm listed shares, which caused the volatility.
NASDAQ immediately spotted the unusual trading pattern, but was unable to contact the Morgan Stanley trader responsible for submitting the orders, which resulted in a breach of the Exchange's Nordic Member Rules.
The rules state that members conducting direct market access trading should ensure that they can be contacted at any time during trading hours.
NASDAQ also noted that although Morgan Stanley's internal systems and controls enabled them to detect and independently terminate the trading, it felt that the incident itself highlighted that the firm did not have technical and administrative arrangements implemented to stop it from happening in the first place.
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