Knight Capital Group overlooked multiple red flags before it mistakenly sent millions of orders to buy and sell stocks last year, according to regulators, who charged the firm with multiple rule violations Wednesday and handed down a $12 million penalty.

The SEC move was the first enforcement action under the agency's so-called "market access rule," enacted in 2010. The rule requires broker-dealers to maintain systems and supervision to prevent erroneous or excessively risky orders. In settling the charges, Knight neither admitted nor denied the SEC's findings.