Federal regulators slapped the New York Stock Exchange with a $14 million fine over a slew of infractions including a 2015 screw up that shut down trading for 3 ¹/₂ hours.
The Securities and Exchange Commission on Tuesday fined the Big Board for failing to put proper rules in place, violating its own rules, and in some cases breaking the law altogether.
On July 8, 2015 — in which a botched software upgrade spurred the worst outage in the NYSE’s 223-year history — the exchange was faulted by regulators for “negligent misrepresentations of material facts,” the SEC said.
NYSE erroneously sent out price quotes that it said were “automated,” even though they weren’t — a designation that would have led investors to believe the systems were still working as normal when they weren’t, according to the SEC.
The settlement, which follows five separate investigations by the SEC, matches the record for the largest-ever fine against a stock exchange. The company doesn’t admit or deny any wrongdoing in the administrative order.
In addition to the shutdown shenanigans, the Big Board “erroneously” halted trading stocks on an affiliated exchange; limited prices on ETFs during a period of high volatility on Aug. 24; and didn’t comply with business continuity requirements.
The NYSE also improperly allowed brokers from 2008 to 2015 to use special order instructions that would give them a heads up if there was a competing trade that could beat them.
“For retail investors to have confidence in our markets, exchanges must provide accurate information and comply with legal requirements, including being equipped for unexpected market disruptions,” Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement, said in a statement.
“We believe this settlement is in the best interest of the NYSE exchanges,” Josh King, a NSYE spokesman, told The Post. “We take our regulatory obligations seriously and remain focused on building and maintaining industry leading technology and insuring that our markets operate with the utmost integrity.”