SEC sues Virtu Financial over failure to safeguard customer information (updated)

Virtu Financial

12/09/2023 22:24

(Adds details from complaint, efforts to reach SEC and Virtu)
       NEW YORK, Sept 12 (Reuters) - The U.S. Securities and
Exchange Commission on Tuesday sued Virtu Financial  VIRT.O ,
accusing the large market maker of misleading investors by
failing to properly safeguard confidential information.
    In a complaint filed in federal court in Manhattan, the SEC
said Virtu, whose broker-dealer unit handles about 25% of market
orders from U.S. retail investors, repeatedly and falsely told
customers that it used "information barriers" and "systemic
separation between business groups" to protect their material
nonpublic information.
    According to the regulator, however, virtually all employees
at the broker-dealer, Virtu Americas, were able from January
2018 to April 2019 to access such information about customers
and their trades.
    The SEC said the information included customer names, and
the names, prices and volumes of securities they bought and
sold.
        Virtu and its lawyers did not immediately respond to
requests for comment.
  
        In July, Virtu said it 
    received a Wells notice
     from the SEC concerning its practices. Those notices
suggest that agency staff found enough information to support
civil charges, and give targets a chance to respond.
  
        
  

 (Reporting by Jonathan Stempel and Chris Prentice in New York;
Editing by Mark Porter and Leslie Adler)
 ((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters
Messaging: jon.stempel.thomsonreuters.com@reuters.net))