The New York Stock Exchange and several affiliates will pay a $4.5 million penalty to settle civil charges over what U.S. regulators say were repeated failures to comply with exchange rules and federal laws.
The Securities and Exchange Commission said that NYSE engaged in a series of different business practices that either violated rules or were conducted without having a rule in place to permit such activity. At least one pertains specifically to high-frequency trading, the subject of Michael Lewis' controversial book "Flash Boys."
The infractions occurred between 2008 and 2012.
"The SEC regulates exchanges, in part, by reviewing rules proposed by the exchanges that govern exchange activities and allow market participants to decide how and where to place orders," Andrew J. Ceresney, director of the SEC's Division of Enforcement, said in a statement. "We will hold exchanges accountable if they fail to have rules governing their operations or fail to follow them."
At a time when the market is under intense scrutiny over the pervasiveness of high-frequency trading and as volume shrinks and polls show confidence in market integrity is low, the announcement shows that conditions remain unsettled.
The fine itself was seen by market experts as minor, but it could help send an important message.
"Four million is not going to break ICE," Peter Costa, a governor at the NYSE and head of Empire Executions, said of Intercontinental Exchange, the NYSE's parent. "It just doesn't look good in light of everything else going on."