SEC suspends trade in stock options trading, option exchange
The Securities and Exchange Commission has suspended trading in stocks trading on options exchange, trading that was supposed to start Monday, the SEC said Wednesday.
The SEC issued the order after an investigation into options trading by New York-based broker BlackRock found that BlackRock did not follow the rules in place to protect the integrity of the exchange and its users, and that the firm was not providing adequate information to investors and traders.
“We believe that our trading practices and our trading system do not meet our standard of integrity,” the SEC wrote in its order.
“We have therefore suspended the trading of stocks on the New York Stock Exchange, as well as all of the options traded on the exchange, until such time as we can resolve this matter.”
The suspension of trading comes after the SEC found that two BlackRock subsidiaries were engaging in a practice of trading options for the benefit of their own shareholders.
In response, BlackRock said in a statement Wednesday that it was reviewing the SEC’s action and will “review all of our trading systems in the future.”
The SEC said it would continue to conduct outreach to the trading community and will update its website when more information is available.