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UPDATE 2-Regulator warns of enforcement over NYSE's 2015 outage -ICE
February 7, 2017 / 2:31 PM / 10 months ago

UPDATE 2-Regulator warns of enforcement over NYSE's 2015 outage -ICE

(Adds CEO’s comments, background on former exchange enforcement actions, financial details, stock price)

Feb 7 (Reuters) - The New York Stock Exchange received notice that staff at the top U.S. securities regulator recommended an enforcement action against the exchange related to a nearly four-hour trading halt on July 8, 2015, NYSE’s parent company said on Tuesday.

The results of the notice from the Securities and Exchange Commission and any enforcement action related to the outage are unknown at this time, NYSE owner Intercontinental Exchange Inc said following the release of its financial results.

“We dispute the appropriateness of the potential charges,” ICE Chief Executive Officer Jeffrey Sprecher said on an earnings conference call with analysts.

NYSE has sent the SEC a letter defending its actions before and during the outage, he said.

“At the end of the day it was a technology outage, it was very unfortunate, it was embarrassing and a black eye but we don’t believe that it actually violated any law.”

The outage resulted from a flawed software rollout the previous evening that caused communication problems between a NYSE trading unit and customers. The NYSE eventually canceled all open orders as it worked to solve the problem.

Previous SEC enforcement actions against exchanges include a $14 million settlement in 2015 to BATS Global Markets over charges that two exchanges acquired by BATS had given advantages to certain high-frequency trading firms.

In May 2013, the SEC penalized Nasdaq Inc $10 million to settle charges stemming from mistakes made during Facebook Inc’s initial public offering in 2012.

ICE on Tuesday said its net income in the fourth quarter dropped to $352 million, or 59 cents per share, from $370 million, or 66 cents per share, a year earlier.

Excluding acquisition-related expenses and other one-time items, the profit was 71 cents a share, topping analysts’ average estimate by two cents, according to Thomson Reuters I/B/E/S.

Shares of ICE were up 2.1 percent at $59.75 in early trading on Tuesday. (Reporting by John McCrank in New York; Editing by Chizu Nomiyama and Paul Simao)

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