The New York Stock Exchange agreed to pay a $9 million to settle US Securities and Exchange Commission allegations that an internal malfunction led to a botched market open and wild price swings on a single day in January 2023.
“NYSE’s failures caused market-wide impacts, including price-triggered restrictions on trading, market-wide trading pauses in 84 of the securities and ultimately thousands of busted trades,” the SEC said in a cease-and-desist order on Friday.
NYSE, which is owned by Intercontinental Exchange Inc., agreed to pay the penalty without admitting or denying the SEC’s claims.
“NYSE promptly compensated affected market participants and enhanced its procedures and systems, and there has been no recurrence of the issue,” ICE said in a statement. “NYSE opening and closing auctions continue to be the most reliable liquidity event for NYSE-listed symbols.”
The exchange experienced technical glitches when the market opened on Jan. 24, 2023. The glitches sparked trading turmoil in companies including Wells Fargo & Co., McDonald’s Corp., Walmart Inc. and Morgan Stanley, in some cases sending stock prices swinging by 25 percentage points in minutes, Bloomberg reported at the time.
NYSE failed to conduct an opening auction for more than 2,800 securities before transitioning to what’s called continuous trading, the SEC said. Instead, a “critical systems disruption” led it to initiate continuous trading, the agency said.
The regulator also said NYSE didn’t establish written policies and procedures to monitor certain systems that support its opening auctions.
“The obligation of national securities exchanges such as NYSE to operate in compliance with their own rules is fundamental,” the SEC said.
This article was generated from an automated news agency feed without modifications to text.
