SEC Fines NYSE for Giving Proprietary Customers Head Start on Market Data

According to the SEC's order against NYSE, the exchange violated this rule over an extended period beginning in 2008 by sending data through two of its proprietary feeds before sending data to the consolidated feeds. NYSE's inadequate compliance efforts failed to monitor the speed of its proprietary feeds compared to its data transmission to the consolidated feeds, the SEC charges.

NYSE Euronext responded in a statement that it entered into the settlement without admitting or denying the SEC's allegations but acknowledged that in accordance with the settlement, NYSE Euronext has agreed to pay a $5 million fine.

"NYSE Euronext is committed to the highest standards of integrity and accountability," said NYSE Euronext CEO Duncan L. Niederauer in the statement. "The timing differentials stemmed from technology issues, not from intentional wrongdoing by the exchange or any of its personnel."

The SEC's allegations focused primarily on differentials in the speed of NYSE's delivery of market data from 2008 through mid-2010, according to an NYSE release.

"The SEC alleged that, at certain times during that period, NYSE delivered market data through two proprietary data feeds slightly faster than it delivered market data to the consolidated tape. The alleged timing differentials, which were generally at the level of milliseconds, were the result of technology issues that have been resolved," the NYSE said. "The SEC does not allege any intentional misconduct or that the NYSE data delays caused any investor harm.  NYSE completed systems modifications in 2010 and 2011 that eliminated the technology issues that were the subject of the investigation."