Liquidnet agrees to a settlement over charges of inadequate controls, safeguards, and misleading disclosures.
The Securities and Exchange Commission (SEC) announced that Liquidnet Inc., a broker-dealer operating multiple alternative trading systems (ATS), has agreed to pay a $5 million penalty to settle charges of regulatory violations. The SEC found that Liquidnet failed to implement proper controls under the market access rule, including inappropriate credit thresholds, such as default limits set as high as $1 billion. Liquidnet also did not adhere to required safeguards to protect confidential trading information and made misleading statements about its market access controls and ATS security measures.
“ATS operators account for a significant amount of liquidity in public markets and are part of the fabric of our market structure,” said Joseph Sansone, Chief of the Market Abuse Unit. “ATS operators must have controls in place to mitigate risks associated with their systems, such as market access and the potential exposure of confidential subscriber trading information in order to protect investors.”
As the Lord Leads, Pray with Us…
- For Chief Sansone to be led by God as he oversees his office within the SEC.
- For former SEC commissioner Paul Atkins as he prepares to chair the commission in President Trump’s administration.
Sources: Securities and Exchange Commission
