Virtu Financial Inc is suing the SEC, alleging on Tuesday its primary regulator had not responded to a public records request.
Virtu, a market maker with a large equities business, said it submitted a Freedom of Information Act (FOIA) request in June to determine if the SEC had met legal requirements to evaluate potential investor harm and market risks while considering new rules for the handling and execution of retail stock orders.
The SEC declined to comment.
The FOIA request sought, among other things, communications between SEC Chair Gary Gensler and various stakeholders involved in retail stock trading.
“What we’re doing is exercising our rights as citizens … to understand what this Chair is looking at and who he’s meeting with,” Virtu Chief Executive Doug Cifu told Reuters.
“We think it’s important that there be clarity and transparency — that’s what the SEC requires of us as a listed company, so we’re just taking that same standard and saying, be transparent in how you’re dealing with potentially seismic changes to equity market structure,” he added.
Cifu has said Virtu may sue the SEC over other potential rule changes Gensler outlined in June.
What Does the Market Maker Fear?
The industry has attacked the SEC as several plans to level the playing field for retail investors have been proposed, one being the ban of PFOF (payment for order flow).
Now it seems market makers such as Virtu want to know ahead of time what the SEC is up to in order to act now.
Virtu suing the SEC speaks volumes since majority of retail investors have doubted the SEC has true power to create any change in the market.
I’m curious to know what you think.
Leave your thoughts in the comment section down below.
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I wonder what their true goals are for the lawsuit. Is this just another form of manipulation meant to further slow any change to the way American stock markets operate, or is it truly for transparency of the SEC’s actions? Even if it is just for transparency that’s probably so they can figure out a way to continue manipulating things after there is transparency….guess we’ll see.
Is this Orwell’s 1984? It seems a little bizarre that the market makers (“crooks”?) are suing the SEC to stop oversight. The public should be suing for SEC nonperformance for decades – failure to implement audit tool (CAT) to catch and stop naked shorting/fraud for over 12 years.
It’s about damn time someone with clout is suing. Damn time!
Let’s start a discussion! Leave your thoughts below.