Citi's LavaFlow Pays $5M To Settle SEC Data Leak Charges

Law360, New York (July 25, 2014, 12:13 PM EDT) -- Citigroup Inc. unit LavaFlow Inc., a leading alternative trading platform, agreed Friday to pay $5 million to settle U.S. Securities and Exchange Commission charges of failing to protect confidential trading data, marking the latest action regulators have taken against off-exchange trading venues.

The case was filed as a settled administrative proceeding with LavaFlow not admitting or denying wrongdoing. Of the settlement figure, the firm will pay a $2.85 million penalty, which the SEC said is its largest to date against an alternative trading system.

One alleged violation stemmed from LavaFlow allowing an affiliate to access and use confidential information about the...

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