The SEC filed a lawsuit against market maker Virtu Financial
Date: 2023-09-13 Author: Karina Ziganova Categories: BUSINESS, IN WORLD
The US Securities and Exchange Commission (SEC) filed a lawsuit against market maker Virtu Financial. The company is accused of deceiving customers regarding the reliability of measures to protect confidential data.
The lawsuit covers the period from January 2018 to April 2019. According to the SEC, at this time, a subsidiary of Virtu Americas and its affiliates used shared passwords to access the database.
Any trader of the company could view confidential information about clients and their orders, the department emphasized. This significantly increased the risk of data leakage, the commission believes.
In addition, the SEC believes that Virtu Americas brokers could use confidential information for prop trading. However, the parent company assured investors that the information was securely protected and the division operated separately.
In the lawsuit, the regulator demands to recover from Virtu Financial all income obtained illegally, as well as a fine, the amount of which is not disclosed. The company responded that it considers the regulator’s accusations unfounded.
In comments to Reuters, the firm's chief executive, Douglas Cifu, said:
“Unfortunately, the SEC's position appears to be driven by politics and headlines rather than actual facts. We look forward to defending our interests in court.”
Notably, Virtu Americas processes up to a quarter of all orders from retail investors in the United States. Following news of the lawsuit, the parent company's stock fell 8% in after-hours trading, according to Yahoo Finance.
The SEC lost its case against Grayscale Investments. This dealt a significant blow to the regulator's prestige.
