Bank Merrill Lynch has agreed to settle a lawsuit from the Commission on securities and stock exchanges of the US $12.5 million due to inefficient trade management mechanisms, which led to destabilization of the market. About it reports the edition Banks.eu.
According to the investigation the regulator, the Bank violated the rules of market access at least 15 times since the end of 2012 to mid-2014. Internal controls the Bank, is designed to prevent erroneous orders that were set too high, making them ineffective.
The Bank broke the rules thresholds under which transactions may be stopped at an unreasonably high level. For example, the trader is concerned that an order to sell 400 thousand shares cannot be processed and introduces a new order to sell 150 thousand shares without canceling the first order. The Bank should have noticed it, but he also set limit orders to 10 million shares.
The Commission agreed that high levels caused a sharp drop in stock prices, which are then suddenly increased for a few seconds.
The Bank has not pled guilty to price fluctuations, stating that the erroneous trades were canceled in most cases and the Bank was not aware of the harm caused to customers, and its controls comply with applicable rules and the expectations of regulators.
Separately six exchanges collectively Bank fined Merrill Lynch $3 million for violating their respective rules of supervision. Goldman Sachs and Morgan Stanley was also fined.