Virtu Financial: Waiting for the Shutdown to End
Virtu reached an agreement to settle an SEC probe in June. Still waiting to finalize.
Virtu Financial, Inc. – VIRT $35.95 Mkt Cap: $5.5 B
From the Virtu Financial, Inc. 10-K filed on 17-Feb-2023:
Initial disclosure of SEC investigation
Legal and Regulatory Proceedings
In the ordinary course of business, the nature of the Company’s business subjects it to claims, lawsuits, regulatory examinations or investigations and other proceedings, any of which could result in the imposition of fines, penalties or other sanctions against the Company. The Company and its subsidiaries are subject to several of these matters at the present time, including, among others, a matter in which the Company has been responding to requests for information from the U.S. Securities and Exchange Commission in connection with an investigation of aspects of the Company’s information access barriers. The Company is cooperating with this civil investigation.
From the Virtu Financial, Inc. 10-Q filed on 31-Jul-2025:
In June 2025, the Company reached an agreement in principle to settle the matter with the SEC’s Enforcement Staff. The terms of the anticipated settlement, which is subject to SEC Commission approval and certain other conditions, are not expected to have a material impact on the Company or its business. The Company anticipates that the agreement will be finalized during the third quarter of 2025. The parties jointly sought and obtained a 60-day stay of proceedings from the District Court in connection with the finalization of the settlement.
From the Virtu Financial, Inc. 10-Q filed on 30-Oct-2025:
In June 2025, the Company reached an agreement in principle to settle the matter with the SEC’s Enforcement Staff. The terms of the anticipated settlement, which is subject to SEC Commission approval and certain other conditions, are not expected to have a material impact on the Company or its business. The Company anticipates that the agreement will be finalized following the reopening of the federal government. The parties previously jointly sought and obtained a stay of proceedings in connection with the finalization of the settlement which remains in effect.
The remaining exposure
In matters related to the SEC investigation noted above, the Company and certain of its current and former executive officers were named as defendants on May 19, 2023 in Hiebert v. Virtu Financial, Inc., No. 23-cv-03770 and on October 31, 2023 in City of Birmingham Retirement and Relief System v. Virtu Financial, Inc., No. 23-cv-08123. The complaints were each filed by purported stockholders in the Eastern District of New York on behalf of a putative class and assert that the Company made materially false and misleading statements and omissions in its public filings in violation of federal securities laws. The complaints were subsequently consolidated and recaptioned in re Virtu Financial, Inc. Securities Litigation, No. 23-cv-03770. The Company believes it has meritorious defenses against claims that its public disclosures were inadequate or misleading. The Company maintains that such disclosures were true and accurate and compliant with applicable law and is defending itself vigorously. The Company also has received requests for information related to the SEC investigation pursuant to Section 220 of the Delaware General Corporation Law from counsel for purported stockholders. On March 26, 2025, members of the Company’s Board of Directors and certain current and former executives were named in a derivative complaint in Adams v. Viola et al., No. 1:25-cv-1688 filed on behalf of the Company in the Eastern District of New York in which it is asserted that the defendants breached fiduciary duties to the Company related to the FS matter. A similar derivative complaint was filed on April 9, 2025 in Deisz v. Viola et al., 25-CV-1958 in the Eastern District of New York against current and former members of the Board of Directors and executives. The derivative complaints were subsequently consolidated and recaptioned In re Virtu Financial Inc. Derivative Litigation. The defendants deny that they breached any fiduciary duties related to the FS matter and are defending themselves vigorously.