The New York Stock Exchange and Nasdaq have accused a U.S. Securities and Exchange Commission official of having an ethical conflict, WSJ writes.
In 2018, the SEC introduced regulations that blocked exchanges from raising data fees to increase profits. The exchanges have appealed to the U.S. Court of Appeals for the District of Columbia Circuit. Now, they’ve brought attention to an SEC official connected to the debate—Brett Redfearn.
Prior to joining the SEC, Redfearn worked at JPMorgan Chase, which bought the data from the exchanges. In 2017, Redfearn criticised raising market-data fees.
What’s more, JPMorgan at the time belonged to the brokerage-industry trade group Securities Industry and Financial Markets Association (Sifma); the group first brought up the fees to the SEC in 2013. The exchanges are looking into Redfearn’s involvement in Sifma's challenge after he joined the SEC.
According to an SEC memo included in the court filing, Redfearn’s work concerning market-data issues was approved by the SEC’s chief ethics lawyer. The memo also stated Redfearn “would occasionally participate on Sifma’s market data committee, which would get updates on the Sifma market data challenges.”
The exchanges argue that Redfearn sent or received as many as 32 emails after joining the SEC with “drafts of the decision that overturned the fee increases.”