20 November 2017
visit www.solutions.lexisnexis.com

Merrill Lynch pays $12.5m fine over mini-flash crashes

26 September 2016  |  4934 views  |  0 Graph 4

The Securities and Exchange Commission has fined Merrill Lynch $12.5 million for ineffective trading controls which led to a series of "mini-flash crashes".

The Bank of America-owned unit caused at least 15 market disruptions between late 2012 and mid-2014, an SEC investigation found.

The bank violated the Market Access Rule because internal controls designed to prevent erroneous orders were set at levels far too high, rendering them ineffective.

For example, Merrill Lynch applied a limit of five million shares per order for one stock that only traded around 79,000 shares per day.

This meant that the broker sent some stock prices crashing, only for them to recover within seconds.

"Mini-flash crashes, such as those caused by Merrill Lynch, can undermine investor confidence in the markets," says Andrew Ceresney, director, enforcement division, SEC.

Separately, six exchanges have collectively fined Merrill Lynch $3 million for violating their respective supervision rules.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Merrill slapped with record fine for repeated transaction reporting failures

Merrill slapped with record fine for repeated transaction reporting failures

22 April 2015  |  4676 views  |  0 comments | 9 tweets | 6 linkedin
UK trader arrested over 2010 'flash crash'

UK trader arrested over 2010 'flash crash'

21 April 2015  |  4669 views  |  0 comments | 2 tweets | 6 linkedin
Flash crash reforms will fail to make markets safer - study

Flash crash reforms will fail to make markets safer - study

18 October 2012  |  6834 views  |  1 comments | 3 tweets | 1 linkedin

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.solutions.lexisnexis.comvisit https://www.niceactimize.comvisit www.aciworldwide.com

Top topics

Most viewed Most shared
Ripple boss predicts central bank adoption of blockchainRipple boss predicts central bank adoption...
18450 views comments | 28 tweets | 31 linkedin
Singapore central bank open sources blockchain prototypesSingapore central bank open sources blockc...
12734 views comments | 16 tweets | 29 linkedin
AmEx partners Ripple and Santander for blockchain-enabled cross-border paymentsAmEx partners Ripple and Santander for blo...
11300 views comments | 15 tweets | 41 linkedin
UK cryptocurrency exchange startup launches debit card for spending bitcoinUK cryptocurrency exchange startup launche...
9126 views comments | 26 tweets | 37 linkedin
Barclays warns of unprecedented online fraud this ChristmasBarclays warns of unprecedented online fra...
8518 views comments | 15 tweets | 31 linkedin

Featured job

Find your next job