So much for perfect information NYSE Euronext has agreed to pay a $5 million fine to the SEC to settle charges that some of its customers got trading information ahead of the general public.

How’s that work, exactly? The SEC has this flow chart:

NYSE had two proprietary data feeds that moved faster than the data feed that went to the general public. One of them bypassed NYSE’s internal distribution system; the other bypassed a “translation layer.” The data feed that went to the public went through the internal distribution system and the “translation layer” – which is where the software issues were.

The data feeds that went to NYSE customers sometimes sent data ahead of the feeds that went to the public; when there were glitches in the software that delivered data to the public, they didn’t affect some of the proprietary feeds. There were different mechanisms in play, but the bottom line is that some of NYSE’s paying customers got information ahead of the general public.

So, that’s not good, and here’s why, according to the SEC order: “A delay in the release of data to the consolidated feeds in contrast to the proprietary feeds can cause an investor relying on the consolidated feeds to make a trading decision based on a potentially stale picture of current market conditions. “