Virtu Americas

Virtu Americas (fka KCG Americas) was censured and fined $175,000 for failing to provide best execution to customer orders it had received from its broker-dealer clients outside of normal trading hours, by failing to use reasonable diligence to ascertain the best market for the subject securities and by failing to buy or sell in such a market so that the resultant prices to the customers were as favorable as possible under prevailing market conditions.

Due to a programming error in the firm’s order management system, certain hold and release orders were executed by the firm’s electronic market making systems prior to the completion of the crossing process.

The hold and release orders were received and executed outside of normal trading hours and were marketable against each other and designated by each customer for execution at the same time but were not executed against each other at the National Best Bid or Offer (NBBO) midpoint.

Instead, the firm executed such eligible buy and sell orders separately, on a principal basis, at the NBBO or a price that was better than the NBBO but that was at prices less favorable than the NBBO midpoint.

The findings also stated that the firm failed to establish and maintain a supervisory system and WSPs reasonably designed to achieve compliance with FINRA Rule 5310 for customer orders executed outside of normal trading hours.