A federal securities fraud class action lawsuit against Virtu Financial Inc. has survived a motion to dismiss, meaning the case will proceed. The complaint alleges that Virtu and certain officers failed to disclose deficient policies and procedures regarding information access barriers.
According to the lawsuit, Virtu overstated its operational and technological efficacy in blocking the exchange of confidential information between departments or individuals. The complaint claims that insiders caused the company to misrepresent or fail to disclose that these deficiencies increased the likelihood of enhanced regulatory scrutiny.
The court's order noted that "essentially anyone at Virtu, including its proprietary traders" could directly access material non-public information from at least January 2018 through April 2019, using a "widely known and frequently shared username and password." This development indicates ongoing legal exposure for Virtu related to its internal controls and past disclosures.
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