The New York Stock Exchange has agreed to pay a $9 million penalty to settle charges brought by the U.S. Securities and Exchange Commission. The charges stem from a computer malfunction in January 2023 that disrupted the market open and caused significant price swings in blue-chip stocks.

The settlement, reached on Friday, relates to an incident in 2023 when the NYSE inadvertently ran both its primary trading system and its backup system—Pillar Production and Pillar DR (Disaster Recovery)—simultaneously.

The SEC stated that the error caused the primary system to mistakenly believe that the opening auction had occurred for 2,824 out of 3,421 "listed securities" traded on the NYSE at the time.

The malfunction resulted in trading halts for 84 stocks, including 81 whose share prices fell more than 10% without cause. More than 4,000 trades were canceled or "busted." Companies such as ExxonMobil, McDonald's, 3M, and Verizon were among those affected.

According to the SEC, it took the NYSE 39 minutes to realize the opening auction was in disarray and 83 minutes to determine the full extent of the disruption.

The cause was attributed to a lack of policies and procedures supporting the "opening auction" process. The NYSE subsequently reimbursed member firms more than $5.77 million for trading losses.

Intercontinental Exchange Group, headquartered in Atlanta, stated that it has since enhanced its procedures and systems. The group also noted that "the NYSE's opening and closing auctions remain the most reliable liquidity events for NYSE-listed securities."