Regulatory actions by the U.S. Securities and Exchange Commission (SEC) have put Virtu Financial (VIRT:NSD), a prominent electronic trading firm, in the spotlight as the company deals with allegations of misconduct and inadequate data protection measures. This article will highlight the influence of these legal proceedings on VIRT stock.
SEC Lawsuit Takes a Toll on VIRT Stock:
In early pre-market trading on Wednesday, Virtu Financial’s shares plummeted by more than 7% following the SEC’s announcement of a lawsuit against the company. The SEC’s allegations center on accusations that VIRT made deceptive statements and failed to establish sufficient safeguards to prevent the misuse of sensitive customer information.
Allegations Against Virtu Americas LLC:
Between January 2018 and April 2019, Virtu’s subsidiary, Virtu Americas LLC, allegedly fell short of adequately securing post-trade data related to customer orders. This data encompassed highly sensitive information, including customer identification and other nonpublic details of significant importance.
The SEC expressed worries that all workers at Virtu Americas and its affiliated entities had unrestricted access to sensitive information. The regulatory body believes that this access could have given Virtu’s proprietary traders an opportunity to use the data to execute trades before their customers’ orders.
Accusations of Security Protocols:
Additionally, the SEC has accused Virtu of overstating its security protocols, creating a false sense of confidence in the protection of institutional investors’ trade data. The regulator is seeking both penalties and reimbursement of any profits that the alleged misconduct may have generated.
Virtu Financial informed the SEC of the breach during an examination in 2019. They’ve implemented policies to prevent unauthorized use of info and expressed disappointment with the SEC’s decision to pursue legal action.
VIRT Stock Forecast:
Analysts offer a mixed perspective on Virtu Financial’s future. According to forecasts from three analysts, the average target price for VIRT stock over the next 12 months is $20.00. This value ranges as high as USD 21 and as low as USD 19 for September 20204.
Analyst Ratings:
The consensus rating for VIRT stock is “Buy.” Stock Target Advisor’s analysis, based on eight positive signals and four negative signals, leans slightly bullish.
At the most recent closing, Virtu Financial’s stock was valued at $18.46. It has experienced a 0.49% decrease in the past week, a 1.76% decline over the past month, and a significant 19.25% drop over the last year.
Uncertainty Looms for Virtu Financial:
Virtu Financial faces a lawsuit from the SEC and allegations of data mishandling. The future is uncertain for the company, and caution is advised for investors.
