The SEC recently filed a federal complaint against a national broker-dealer, alleging that the broker-dealer made false statements that its affiliates maintained information barriers for their databases, when in fact, the affiliates failed to adequately safeguard the data.
The SEC alleges that the broker-dealer told customers that each affiliate’s data was walled off from the others, and that it maintained “systematic separation between business groups” to safeguard its clients’ data, when in fact the data was easily accessible to anyone at any of the company’s affiliates. The SEC also alleges that the broker-dealer failed to establish, maintain, and enforce written policies and procedures to prevent misuse of sensitive information.
The SEC seeks to enjoin the company from further violations, disgorgement of gains, and civil penalties.
The case is SEC v. Virtu Financial Inc., et al., case number 1:23-cv-8072, in the U.S. District Court for the Southern District of New York.