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.
Financial firms in particular might want to study the settlement and then review their controls, especially those associated with trading. John Sylvia, co-chair of the securities litigation practice group at law firm Mintz Levin, says the focus on the failures at Direct Edge is a sign of the “enhanced scrutiny that the SEC is giving to the market.”
