French Regulator Considers Fining Virtu Financial for 2009 Trading 

Autorité des Marchés Financiers previously accused Virtu’s Madison Tyler Holdings of violations

A French regulator is considering a multimillion euro fine for Virtu Financial Inc. as it weighs a penalty for trading that took place in 2009.

France’s Autorité des Marchés Financiers previously accused Madison Tyler Holdings, a firm Virtu acquired fully in 2011, of breaking rules about the number of times it was allowed to change its quotes to buy or sell stocks on the French stock market. The violations affected 27 stocks on the Paris stock exchange between July 21, 2009, and September 2, 2009.

Madison Tyler was one of the earliest high-frequency trading firms when it launched in 2002. One of its co-founders, Vincent Viola,also helped start Virtu in 2008. Virtu, which went public last April, is now one of the largest high-frequency trading firms in the world.

The enforcement division of the AMF has proposed a fine of €5 million, but the final amount hasn’t been decided, according to a spokeswoman. Euronext, the pan-European exchange operator, is also accused of allowing Virtu to exceed the maximum threshold of quotes and faces a fine of up to €4 million, she said.

A committee overseeing enforcement cases heard testimony from Virtu and Euronext on Wednesday. They are expected to make a final decision on the fines in about a month.

Doug Cifu, chief executive of Virtu, said in a statement that the strategies of Madison Tyler “were conducted in full compliance with all applicable French law and regulations without any intent to manipulate the market” and that it was optimistic the enforcement committee would see no fine was necessary.

A spokeswoman for Euronext said in a statement: “Euronext unequivocally denies any conflict of interest and any desire to have helped one of our members to the detriment of market integrity and denies committing any breach of its professional obligations,” a spokeswoman for Euronext said in a statement.

Virtu first disclosed the case in its filing with the Securities and Exchange Commission to go public last year.

Source: WSJ – French Regulator Considers Fining Virtu Financial for 2009 Trading

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