The U.S. Securities and Exchange Commission (SEC) today announced a settlement of allegations that broker Citadel Securities LLC violated the terms of the SHO Regulation.。

The SHO Regulation, a regulatory framework designed to address abusive short selling, requires broker-dealers to mark sales orders as long, short or short exempt。Regulators typically use these records when regulating prohibited short selling。

To settle SEC charges, Citadel Securities agrees to pay $7 million fine。

According to the SEC's order, Citadel Securities is estimated to have incorrectly flagged millions of orders over a five-year period, falsely representing certain short sales as long trades and vice versa.。The SEC order argued that the inaccurate marking was the result of a coding error in the automated trading system for Citadel Securities, which provided inaccurate data to regulators including the SEC during the period.。

The order accuses Citadel Securities of violating section 200 (g) of the Securities Exchange Ordinance.。Citadel Securities neither admitted nor denied the findings, but agreed to a cease-and-desist order, a $7 million fine and a series of commitments, including written certification that coding errors had been corrected, and a review of the company's computer programming and coding logic for processing related transactions.。