Companies searching for examples of the Securities and Exchange Commission’s latest thinking on good internal controls can learn a thing or two from the growing pains of stock exchange operator Direct Edge. The company was forced to settle with the SEC after a series of lax controls caused millions of dollars in trading losses.

Jaclyn Jaeger is a freelance contributor to Compliance Week after working for the company for 15 years. She writes on a wide variety of topics, including ethics and compliance, risk management, legal,...