Since January 2017, the SEC has quietly racked up at least half a dozen major enforcement actions charging a wide range of equity market structure violations. In these cases, dark pools, exchanges and broker-dealers have collectively paid more than $100 million in civil penalties and several of them have involved admissions of liability. Although the Division of Enforcement issued press releases announcing each of the cases, it has been notably restrained in promoting its concentrated efforts in this area, as evidenced by the absence of any mention of market structure enforcement activity in its recently issued 2018 Annual Report. Nevertheless, the number of cases and size of penalties in these actions make clear that market structure enforcement remains a top priority for the Commission and the Enforcement Division’s Market Abuse Unit (MAU). The consequence of this low-key but robust enforcement approach is that market structure enforcement continues to be a high-risk compliance area for market participants with large dollar consequences for would-be violators.
‘Enforcement 40’ for 2020
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