NYSE Fined $9 Million by SEC for Auction Failures
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy ICE?
Source: NASDAQ.COM
- Penalty Amount: The SEC imposed a $9 million civil penalty on the NYSE for failing to conduct opening auctions for over 2,800 securities in January 2023, highlighting significant regulatory shortcomings in market oversight.
- Incident Background: The disruption occurred on January 24, 2023, when NYSE inadvertently operated its primary and backup trading systems simultaneously, causing the primary system to mistakenly treat the opening auctions for thousands of securities as completed, thus failing to execute them and disrupting normal market operations.
- Market Impact: The failure to conduct auctions led to widespread market consequences, including trading pauses in 84 securities and thousands of canceled trades, indicating serious deficiencies in NYSE's compliance and monitoring of trading systems.
- Compliance Violations: The SEC found that NYSE violated Regulation SCI and Section 19(g)(1) of the Exchange Act, and while NYSE neither admitted nor denied the findings, it agreed to a cease-and-desist order along with the penalty, reflecting flaws in its internal controls and compliance management.
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Analyst Views on ICE
Wall Street analysts forecast ICE stock price to rise
10 Analyst Rating
9 Buy
1 Hold
0 Sell
Strong Buy
Current: 160.170
Low
174.00
Averages
191.60
High
223.00
Current: 160.170
Low
174.00
Averages
191.60
High
223.00
About ICE
Intercontinental Exchange, Inc. provides financial technology and data services across major asset classes, helping its customers access workflow tools that increase transparency and efficiency. Its Exchanges segment operates regulated marketplace technology for the listing, trading and clearing of an array of derivatives contracts and financial securities as well as data and connectivity services related to its exchanges and clearing houses. Its Fixed Income and Data Services segment provides fixed income pricing, reference data, indices, analytics and execution services as well as global credit default swaps (CDS), clearing and multi-asset class data delivery technology. Its Mortgage Technology segment provides a technology platform that offers customers comprehensive, digital workflow tools that aim to address inefficiencies and mitigate risks that exist in the United States residential mortgage market life cycle, from application through closing, servicing and the secondary market.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Incident Background: The disruption occurred on January 24, 2023, when NYSE inadvertently operated its primary and backup trading systems simultaneously, causing the primary system to mistakenly treat the opening auctions for thousands of securities as completed, thus failing to execute them and disrupting normal market operations.
- Market Impact: The failure to conduct auctions led to widespread market consequences, including trading pauses in 84 securities and thousands of canceled trades, indicating serious deficiencies in NYSE's compliance and monitoring of trading systems.
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- Dual Listing Structure: The transaction will involve a dual listing of both Pershing Square's common shares and its closed-end fund PSUS, allowing investors to trade these securities separately, thereby filling the gap of having no public market previously and enhancing liquidity.
- Funding Commitments: Ahead of the listing, Pershing Square has secured $2.8 billion in commitments from a mix of family offices, pension funds, insurance companies, and ultra-high-net-worth investors, reflecting strong market confidence in Ackman's investment strategy.
- Long-Term Capital Strategy: Ackman emphasized that the permanent capital model allows for a long-term view during market volatility without the need to sell assets to meet redemptions, aligning closely with Buffett's investment philosophy aimed at achieving long-term compounding growth.
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- Incident Background: The disruption occurred on January 24, 2023, when NYSE inadvertently operated its primary and backup trading systems simultaneously, causing the primary system to mistakenly treat the opening auctions for thousands of securities as completed, thus failing to execute them and disrupting normal market operations.
- Market Impact: The failure to conduct auctions led to widespread market consequences, including trading pauses in 84 securities and thousands of canceled trades, indicating serious deficiencies in NYSE's compliance and monitoring of trading systems.
- Compliance Violations: The SEC found that NYSE violated Regulation SCI and Section 19(g)(1) of the Exchange Act, and while NYSE neither admitted nor denied the findings, it agreed to a cease-and-desist order along with the penalty, reflecting flaws in its internal controls and compliance management.
See More
