Virtu, a large market maker, to pay $2.5 million SEC fine over client trading data

NEW YORK, Dec 3 (Reuters) – Virtu Financial will pay a $2.5 million fine to settle U.S. Securities ​and Exchange Commission accusations the large market maker ‌improperly allowed almost all employees at its broker-dealer unit access to ‌confidential information about customers and their trades.

The broker-dealer unit Virtu Americas, which according to the SEC handled about 25% of market orders from U.S. retail investors during the relevant ⁠period, did not ‌admit or deny wrongdoing, the SEC said on Wednesday. U.S. District Judge John Koeltl in ‍Manhattan approved the accord.

In a civil complaint filed in September 2023, the SEC said Virtu repeatedly told customers that it ​used “information barriers” and “systemic separation between business groups” to protect ‌their material nonpublic information.

The SEC said that was false, because broker-dealer employees were able from January 2018 to April 2019 to access customers’ names, and the names, prices and volumes of securities that customers bought and sold, ⁠by using a “widely known and ​frequently shared generic user name and ​password.”

Virtu, based in Manhattan, had no immediate comment on the settlement.

It has said it voluntarily disclosed ‍to the SEC ⁠in 2019 that trade data may have been accessible to more employees than intended, and that ⁠it coincided with a migration of a recently acquired business into ‌a back-office database.

(Reporting by Jonathan Stempel in New ‌York; Editing by Lincoln Feast.)