|By Ricardo Lopez, Los Angeles Times|
The civil lawsuit comes on the heels of newly proposed reforms by the
Friday's legal action was filed in an administrative law court against
The two executives —
The trades produced high fees and commissions for
In a statement, company spokesman
Chisum said that the firm had discussed its processes and controls with regulators in 2011 before a market-access rule became effective and the firm had contributed to the rule-making process.
"In several respects, however, the
Regulators, in court documents, say that
The lawsuit specifically alleges that
Some of the allegations include failing to maintain direct and exclusive control in trading platforms that allowed customers to send trading orders. Some customers were able to use third-party platforms to make trades. The company, according to regulators, also failed to restrict trading access solely to people that firm had pre-approved and authorized.
"Violations of the market access rule pose significant risks to the orderly functioning of the U.S. securities market," the lawsuit said.
Among the proposed measures is a rule intended to curb aggressive, short-term tactics when the market is especially volatile. White also wants to see private high-frequency traders registered as dealers, a change that would bring them under
White expressed concerns about transparency and directed particular aim at "dark trading venues," which now account for up to 35% of trades.
Unlike public stock exchanges, dark venues are private, off-market platforms that offer limited information about participants or how they operate.
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|Source:||McClatchy-Tribune Information Services|