The New York Stock Exchange (NYSE) has agreed to pay a $9 million civil penalty to the U.S. Securities and Exchange Commission (SEC) following a systems failure in January 2023. This incident disrupted the opening of trading in 2,824 NYSE-listed securities, leading to trading halts and canceled trades. The failure occurred when a disaster-recovery backup system was mistakenly left running, causing the primary system to skip the standard opening auction process.
The SEC's order highlighted that NYSE violated Regulation SCI and failed to adhere to its own rules requiring opening auctions. The exchange has since implemented additional safeguards, including improved monitoring and validation processes, to prevent similar disruptions. Beyond the penalty, NYSE compensated member firms with over $5.77 million for trading losses, bringing the total cost of the incident to approximately $14.77 million.
NYSE Fined $9M by SEC for 2023 Opening Auction Failure
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