- The SEC has announced a multimillion-dollar settlement.
- The settlement involved charges against the Intercontinental Exchange (ICE).
- Some commissioners slammed the enforcement action.
The U.S. Securities and Exchange Commission (SEC) has announced a multimillion-dollar settlement with the Intercontinental Exchange (ICE) and nine of its affiliates, including the New York Stock Exchange (NYSE).
Founded in 2000, ICE operates multiple regulated financial exchanges and clearing houses globally. This includes ICE Futures Singapore and ICE Clear Singapore, the company’s MAS-approved face in the digital assets industry.
SEC Charges and Fines ICE
According to a press release dated May 22, the SEC has charged ICE and its nine affiliates with failing to inform the commission of a cyber intrusion involving a previously unknown vulnerability in the company’s virtual private network (VPN).
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The SEC claimed ICE did not report the security incident to the regulator or its nine affiliates “for several days,” in violation of the company’s own internal cyber incident reporting procedures and Regulation Systems Compliance and Integrity (Regulation SCI) rules.
Regulation SCI requires companies to immediately contact SEC staff about cyber intrusions and provide an update within 24 hours, unless it is “reasonably” concluded that the incident has “no or a de minimis impact” on the firms and market participants.
The SEC said ICE and the nine subsidiaries have agreed to a cease-and-desist order and a $10 million civil penalty to settle the charges.
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“Without admitting or denying the SEC’s findings, ICE and its subsidiaries agreed to a cease-and-desist order in addition to ICE’s monetary penalty,” the statement read.
While the SEC’s “swift steps to protect markets and investors” are commendable, Commissioners Hester Peirce and Mark Uyeda dissented from the enforcement action, noting that it was an “overreaction.”
SEC’s “Overreaction”
Commissioners Pierce and Uyeda expressed concerns about the SEC’s settlement with ICE, stating that “this type of response is increasingly common in Commission enforcement actions.”
“When regulatory foot faults result in ever-steeper penalties that bear little to no relation to real-world harm, the perception that the Commission’s penalty regime is more a tool to generate numbers for year-end statistics and less a means to achieve outcomes that enhance market integrity and investor protection begins to appear not unreasonable,” the commissioners wrote.
Per the commissioners, the SEC is focused on generating large penalties instead of ensuring that important market entities address tech vulnerabilities.
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