Hedge Fund Virtu Financial, Inc. (NASDAQ:VIRT) may face a new fraud class action lawsuit from investors in wake of several violations.
The SEC has been investigating the hedge fund in relations to the company’s “information access barriers”.
Virtu also received a Wells Notice in February, an indication that the SEC has discovered evidence of possible violations of the securities laws from the hedge fund.
Shares of the company have fallen based on these SEC reports and now investors have an opportunity to sue the hedge fund through a class action lawsuit.
The Law Offices of Frank R. Cruz announced on Wednesday that investors with substantial losses have opportunity to lead the securities fraud class action lawsuit against Virtu.
The complaint filed alleges that, throughout the Class Period, Defendants failed to disclose to investors that:
- The Company maintained deficient policies and procedures with respect to its information access barriers.
- Virtu had overstated the Company’s operational and technological efficacy as well as its capacity to block the exchange of confidential information between departments or individuals within the Company.
- The foregoing deficiencies increased the likelihood that the Company would be subject to enhanced regulatory scrutiny.
- As a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
The lead plaintiff deadline is July 18, 2023.
Below is the official announcement.
Also Read: Citadel Draws Fresh Scrutiny from SEC in New Risky Bets
Virtu Faces New Class Action Lawsuit from Investors
“If you are a shareholder who suffered a loss, click here to participate.
On February 17, 2023, after the market closed, Virtu published its full year 2022 financial results, disclosing that “the Company [had] been responding to requests for information from the U.S. Securities and Exchange Commission in connection with an investigation of the Company’s information access barriers.” On this news, Virtu’s stock price fell $0.32, or 1.6%, to close at $19.69 per share on February 21, 2023, thereby injuring investors.
Then, on April 28, 2023, Virtu released its first quarter 2023 financial results, one again stating that it had been in contact with the SEC, adding that “[i]n the absence of a settlement, the Company currently believes it may receive a Wells Notice from the SEC,” and “the proposed action would be expected to allege violations of federal securities laws with respect to the Company’s information barriers policies and procedures for a specified time period in and around January 2018 to April 2019 and related statements made by the Company during such period.”
On May 1, 2023, the Wall Street Journal published an article revealing that a Virtu spokesperson stated that the investigation was “primarily focused on an access controls weakness in one of Virtu’s internal back office systems containing post trade information that theoretically could allow certain system users access greater than what was intended by our policies.”
On this news, Virtu’s stock price fell $1.13, or 5.7%, over two consecutive trading days to close at $18.77 per share on May 3, 2023, thereby injuring investors further.
The complaint filed alleges that, throughout the Class Period, Defendants failed to disclose to investors that: (1) the Company maintained deficient policies and procedures with respect to its information access barriers; (2) accordingly, Virtu had overstated the Company’s operational and technological efficacy as well as its capacity to block the exchange of confidential information between departments or individuals within the Company; (3) the foregoing deficiencies increased the likelihood that the Company would be subject to enhanced regulatory scrutiny; and (4) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.”
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