BoA Merrill Lynch Handed $12.5 Million Fine by SEC over Mini-Flash Crashes

Bank of America subsidiary fined over inadequate trading controls leading to market disruptions between 2012 and 2014.

baml

Bank of America Merrill Lynch (Merrill Lynch) has accepted a $12.5 million fine from the Securities and Exchange Commission (SEC) over its failure to implement adequate trading controls that caused at least 15 cases of market disruptions between late-2012 and mid-2014.

An SEC investigation found that due to its "inadequate trading controls", Merrill Lynch failed to prevent erroneous orders being sent to the markets and causing mini-flash crashes, violating the Market Access Rule.

"Mini-flash crashes, such as those caused by Merrill Lynch, can undermine investor confidence in the markets," said Andrew Ceresney, director of the SEC Enforcement Division. "It is essential that broker-dealers with market access have reasonable controls to prevent erroneous orders that disrupt trading."

The penalty, which the SEC states Merrill Lynch accepted "without admitting or denying the findings", is the largest to be imposed since a similar charge was brought against Knight Capital Americas ($12 million) in 2013.

In April last year, the UK Financial Conduct Authority (FCA) imposed a fine of £13.2 million (approximately $19.8 million) on Bank of America Merrill Lynch International (MLI) for submitting more than 35 million incorrect trading reports and failing to report another 121,387 transactions between November 2007 and November 2014.

  • LinkedIn  
  • Save this article
  • Print this page  

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

You need to sign in to use this feature. If you don’t have a WatersTechnology account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: