Some of the 2023 SEC enforcement actions. Cabal, maybe, maybe not. Bad actors certainly.
The SEC charged broker-dealer Citadel Securities LLC with violating a provision of Regulation SHO that requires broker-dealers to mark sale orders as long, short, or short exempt. Regulators routinely use these records to police prohibited short selling activity. According to the SEC’s order, Citadel Securities incorrectly marked an estimated millions of orders for a five-year period, inaccurately denoting certain short sales as long sales and vice versa, and provided the inaccurate data to regulators, including the SEC. Citadel paid a $7 million civil penalty to resolve the charges and consented to a set of undertakings, including a written certification that the coding error had been remediated and a review of the firm’s computer programming and coding logic involved in processing relevant transactions
Market Abuse
In fiscal year 2023, the SEC brought enforcement cases addressing a variety of abusive trading practices, such as insider trading, front-running, and market manipulation. For example, the Commission charged:
Eight social media influencers for allegedly using social media to manipulate exchange-traded stocks in a $100 million securities fraud scheme;
Two financial services industry professionals for allegedly perpetrating a multi-year front-running scheme that generated at least $47 million in illegal trading profits
n the Division’s recommendations, the Commission filed settled charges imposing robust financial remedies against major companies in actions that addressed a wide range of securities law violations.
For example:
Twenty-five advisory firms, broker-dealers, and/or credit rating agencies, including Wells Fargo, HSBC, and Scotia Capital, agreed to pay combined civil penalties totaling more than $400 million to settle charges that they violated the recordkeeping requirements of the federal securities laws;
