The SEC has announced that the asset manager State Street has agreed to pay a fine of 3 million USD to settle for failing to disclose material information to customers about its cash US Treasury trading platform.
State Street operates the GovEx electronic trading platform. As with many dealer-operated electronic trading platforms, GovEx incorporated "last look" functionality. What is unusual about this case is that, according to the SEC, State Street allowed a single customer access to the functionality. The customer used their access to reject 57 trades, each with a face value of 1 million USD. State Street failed to inform other counterparties using the platform that a last look provision existed, even going so far as to tell one subscriber that GovEx didn't support last look.
Details of the lucky customer were not disclosed by the SEC. It is not clear whether they knew that they had sole access to last look, and if they did, why State Street was so keen to provide it to them.