$6M CBOE Fine Is 1st SEC Action To Target Oversight Failures

Law360, New York (June 11, 2013, 3:51 PM EDT) -- The U.S. Securities and Exchange Commission on Tuesday levied its first-ever fine against a stock exchange for oversight issues, docking the Chicago Board Options Exchange $6 million for allegedly failing to enforce or even understand rules designed to prevent illegal short-selling.

The SEC filed and settled an administrative action claiming CBOE failed to adequately police abusive trading practices at a member brokerage firm called optionsXpress Inc., and generally did not enforce an SEC rule designed to crack down on naked short-selling.

In a short sale, a...
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