The Securities and Exchange Commission fined the Chicago Board Options Exchange and an affiliate $6 million yesterday for what it called breakdowns in regulatory oversight, including a failure to enforce rules to prevent abusive short-selling, the New York Times DealBook blog reported yesterday. The agency said that the financial penalty against the exchange and its affiliate, C2 Options Exchange, was the first action related to an exchange’s responsibility to self-police its market. The case stemmed in part from oversight of OptionsXpress, a firm now owned by Charles Schwab, which was accused by the SEC of engaging in an abusive naked short-selling scheme, or selling shares before borrowing them first. An SEC judge on Friday ordered OptionsXpress, its former chief financial officer and a customer to pay $4.8 million in fines and to return $4.2 million.
