Virtu Financial (VIRT) Announces Commencement of Lawsuit Against the Securities and Exchange Commission to Compel Compliance with Freedom of Information Act Request
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Virtu Financial, Inc. (NASDAQ: VIRT) announced that it took the extraordinary step of commencing a Freedom of Information Act (FOIA) lawsuit today to compel the Securities and Exchange Commission to comply with its statutory obligations to provide information about its rulemaking process and the interactions of the Chair of the SEC with interested parties. The action was filed in the U.S. District Court of the Southern District of New York. Virtu is represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP.
In June of 2022, Virtu submitted a FOIA request to determine whether the SEC’s rulemaking process included the legally required evaluation of potential investor harm and market risks, whether the SEC has solicited input from sufficiently broad sources and whether it had considered objective data before the Chair instructed the SEC staff to prepare new rule proposals for retail stock order handling and execution. Remarkably, after nearly six months of detailed and compelling FOIA requests, the SEC has failed to produce a single responsive document even though such documents plainly exist. The SEC’s continued delay raises a significant concern and rather than speculating as to why basic information is being withheld, Virtu was compelled to initiate this action.
“FOIA requests are highly routine in nature and among the important rules and procedures that provide a check on government, yet the Chair’s delays and lack of transparency raise serious concerns,” said Douglas Cifu, Chief Executive Officer of Virtu Financial. “We do not take lightly the step of suing our primary regulator, but it has become clear that the Chair of the SEC is more focused on politics and regulation by innuendo and hypothesis than earnestly engaging with an industry that has created the most fair and competitive equity markets for retail investors globally.”
Virtu has a strong history of contributing to the rulemaking process in a productive manner by filing comment letters and engaging with and providing data to SEC staff during the rulemaking and public comment periods; indeed, Virtu supports a number of market structure reforms being contemplated by the Chair. Virtu’s FOIA request aims to determine who the SEC has met with and the nature of the meetings and data that influenced the direction of the Chair’s proposals. Virtu looks forward to the Chair and the SEC complying with their legal obligations under FOIA and all other oversight requirements.
Virtu appreciates and continues to engage with the hard-working staff members of the SEC who are committed to the SEC’s mandate of investor protection, facilitation of capital formation and the maintenance of fair, orderly and efficient markets.
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