Two Days After Swearing Market Isn't Rigged, SEC Slaps NYSE Wrists For Rigging Markets

Tyler Durden's picture

It is somewhat ironic, actually make that criminal, that two days after new SEC head Mary Jo White (whose conflict of interest list is so vast courtesy of her prior position as defending every Wall Street from their criminal acts she now has to recuse herself from virtually every enforcement action) solemnly promised Congress under oath that the "markets are not rigged", the SEC comes out swinging and slaps the wrist of the NYSE with an intolerable $4.5 million fine for allowing market rigging "for a period of time from 2008 to 2012."

From the SEC complaint:

The Securities and Exchange Commission today announced an enforcement action against the New York Stock Exchange and two affiliated exchanges for their failure to comply with the responsibilities of self-regulatory organizations (SROs) to conduct their business operations in accordance with Commission-approved exchange rules and the federal securities laws.  Also charged was the NYSE exchanges’ affiliated routing broker Archipelago Securities.

The details:

“The order highlights instances where the exchanges conducted business without a rule in place due to weak or inadequate policies and procedures,” said Antonia Chion, an associate director in the SEC’s Division of Enforcement.  “In other instances, the exchanges did not operate in compliance with their effective rules.  Both failures reflect a troubling lack of compliance with the requirements and obligations imposed on securities exchanges.”

The violations detailed in the SEC’s order occurred during periods of time from 2008 to 2012.  The SEC’s order finds that the NYSE exchanges violated Section 19(b) and 19(g) of the Securities Exchange Act of 1934 through misconduct that included the following:

  • NYSE, NYSE Arca, and NYSE MKT (formerly NYSE Amex) used an error account maintained at Archipelago Securities to assume and trade out of securities positions without a rule in effect that permitted such trading and in a manner inconsistent with their rules for the routing broker, which limited Archipelago Securities’ activity primarily to outbound and inbound routing of orders on behalf of those exchanges.
  • NYSE provided co-location services to customers on disparate contractual terms without an exchange rule in effect that permitted and governed the provision of such services on a fair and equitable basis.
  • NYSE operated a block trading facility (New York Block Exchange) that for a period of time did not function in accordance with the rules submitted by NYSE and approved by the SEC.
  • NYSE distributed an automated feed of closing order imbalance information to its floor brokers at an earlier time than was specified in NYSE’s rules.
  • NYSE Arca failed to execute Mid-Point Passive Liquidity Orders (MPLOs) in locked markets (where the bid and ask prices are the same) contrary to its exchange rule in effect at the time.

In addition, the SEC’s order finds that NYSE Arca accepted MPLOs in sub-penny amounts for National Market System stocks trading at over $1.00 per share, in violation of Rule 612(a) of Regulation NMS.


The SEC’s order further finds that Archipelago Securities failed to establish and maintain policies reasonably designed to prevent the misuse of material, nonpublic information in connection with error account trading.  Archipelago Securities also violated and failed to give the SEC timely notice of its violation of the net capital rule – a critical federal securities law provision intended to ensure that brokers and dealers remain solvent and can meet their financial obligations.  

Or in other words, the SEC is claiming that for 5 years the NYSE was aiding and abetting the very same rigged market that the SEC swears does not exist.

It. Just. Does. Not. Compute.

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Xibalba's picture

This is a homophobic article.  Prepare to be banned for life, fined, and forced to liquidate all assets.  

Canadian Dirtlump's picture

What the fuck is moe howard doing testifying in front of congress and why is he in drag?

SAT 800's picture

Shit fire and save matches; them Yankees is slipprier than deer guts on a doorknob.

Manthong's picture

For some reason I have these images of the laid out maggot infested entrails of a hyena rotting in the desert in my mind.

I cannot figure out why that would be.

Pladizow's picture

And this is why wall st. will not get even one of my dollars!

It's a den of thieves!

SoilMyselfRotten's picture

Mary Jo go girl

Bananamerican's picture

Three cheers for diversity!

It makes me proud to know that in AMERIKA even grotesque Lesbian dwarves can carry water for Wall Street Banks!


"Feel the Dildo Amerika!!™"

Save_America1st's picture

so, gee...isn't that the same time period during which Jon Stewart's (of The Daily Show) brother, Larry Leibowitz, was COO of the NYSE?

Then he left...moved on to try and run away from his own corruption maybe?


He ran the joint from 2007 through end of 2013.


Maybe his Lib-tard, smart-ass, thinks-he-knows-it-all, typically fake-named brother would like to quip a few jokes about that some night, ay? 


Bay of Pigs's picture

Thanks for posting that fact. Jon Stewart is clearly a liar and an asshole, covering for his brothers corruption and fraud issues at the NYSE.

RevRex's picture



Hillary's new gal pal Adolpha?

Squid-puppets a-go-go's picture

$4.5 million? Is that it?

Nothing will get fixed. The US will instead collapse USSR like

Headbanger's picture

But Manthong... What do the entrails say?/  What do they foretell damn it!!??

SAT 800's picture

OOkay. It's probably just the general smell of the whole thing, I suppose.

SilverIsKing's picture

<- James Clapper

<- Mary Jo White


It's the game of 'who'd you rather', the perjury version.


yrad's picture

"Like playing poker with my sisters kids"

El Vaquero's picture

Who would you rather what?  The what is the question.  Have sex with?  Shoot?  Because if it is the former, I'd rather do the latter to myself. 

drendebe10's picture

"There ain't nuthin uglier than an old white woman."   Fred Sanford, Sanford and Son.

SAT 800's picture

My ex-girlfriend in California sent me a picture of herself now that she's 70; dang gum; I'm gonna have a time forgetting that. I mean, I look okay, you know; but---what you said !

Zymurguy's picture

Moe Howard?  I thought that was Mickey Rooney?

maskone909's picture

shit man.  you read my mind!  everytime i see that thing i think,"DONT LOOK INTO THE LIGHT!!"

Colonel Klink's picture

I'd rather look INTO the light so I'm blinded and don't have to see her.

Overfed's picture

WTF is it with the O'bomb-a and Clinton administrations and their love for incredibly ugly bulldykes?

Headbanger's picture

One word...   Hillary.

SAT 800's picture

Don't do that, William ! I was innocently scrolling down my page and drinking mah diet Pepper, and damn this friggin thang hit me in the eyball. got pepper in mah nose.

Wm the Shrubber's picture

When do the torches and pitch forks come out?

McMolotov's picture

When the EBT spigot gets turned off and Dancing with the Stars gets canceled.

maskone909's picture

saw a glimpse of the "real housewives" for the first time yesterday. worst 30 seconds of my life.  god help us.

SAT 800's picture

I'm sorry to tell you this; but God has left the building. He couldn't stand it any longer.

El Vaquero's picture

Canceling DWTS, or whatever fuckwit show, will lead to some grumbling.  Cutting EBT off is where the real mayhem lies.  And by cutting it off, I'm including the possibility that the government, in all of its lying wisdom about inflation, does not raise the benefits fast enough to keep up with inflation, and EBT becomes useless as a possibility.

TheRideNeverEnds's picture

I dont see that happening, the Free Shit Army is the largest one ever assembled in the known history of the universe.  Take away their bread and they will burn this this place to the ground.  


Congo 2.0

Stoploss's picture

It's times like these, when coons get fat.

Should we even bother to call our brokers?

When you have no rule of law in your country, does it really matter?

We should be settling the issues the old fashioned way.  Real law..

El Vaquero's picture

If the government doesn't follow its own laws, why should you and I follow its laws?  The only reason I can cite is the use of force by a government SWAT team.  But ethically, why should we follow its laws if it doesn't follow them?  

Stoploss's picture

Bingo.  My thoughts exactly.

ArkansasAngie's picture

Instead of us "starting" to break laws ... how about we force these yahoos into obeying the laws?

How ... by throwing the bums out

El Vaquero's picture

In our current system, even if you elect new people who have good intentions, they will be corrupted, and will become bums.  In essence, you'll be replacing one bum with another.  Unless the bums you are referring to are on K Street.  Throwing those bums out might get you somewhere, so long as you make sure that they aren't replaced. 

The Axe's picture

Nothing happening here....move on....or just throw yourself on the third

SAT 800's picture

Don't forget to pee on it first to make sure it's turned on; otherwise you might just fall down and hurt your face. Just trying to be helpful.

mtndds's picture

So the market really is rigged?!  I thought everyone was playing a honest game.  Shame on me!

PlusTic's picture

real surprise :o/sarc.!

Darkdoc's picture

She means Now it's not rigged.

As of yesterday.

Osmium's picture

Damn it, beat me to it.

NoDebt's picture

Exactly.  NOW it's cool.  Back then, no way.

Dre4dwolf's picture

I'm sorry, but is everyone on drugs, or are we all being sarcastic?

NoDebt's picture

Would you like some drugs?

darteaus's picture

"Mom!  SheepDog got into your stash again!"