The company was sued for making "materially false and misleading statements" regarding information barriers to prevent the misuse of sensitive customer information, the regulatory watchdog said in a statement.

"Virtu allegedly painted a materially misleading picture as to the safeguards it had in place to protect its customers' confidential information, even when customers specifically asked about the firm's handling of their post-trade information," said Carolyn M. Welshhans, Associate Director of the SEC's Enforcement Division.

The SEC's complaint alleges Virtu's database was accessible to practically anyone, including proprietary traders, through generic usernames and passwords.

The regulatory watchdog also claimed that some of Virtu's statements concerning these policies and procedures were overstated and false.

From approximately January 2018 through April 2019, Virtu Americas allegedly failed to safeguard a database containing all post-trade information generated from customer orders.

Virtu's Response 

"Unfortunately, the SEC's position appears to be driven by politics and headlines rather than the facts and the law," said Virtu's Chief Executive Officer, Mr. Douglas A. Cifu. 

Earlier, Virtu also had filed a lawsuit against the SEC to seek records under the Freedom of Information Act (FOIA) related to the rulemaking process.

"Under these circumstances, we look forward to vigorously defending ourselves in court against these meritless allegations while maintaining our focus on serving clients and markets globally and creating long-term value for our shareholders," the CEO added.

Price Action: VIRT shares closed higher by 1.15% to $18.46 on Tuesday.