SEC Charges Dark Pool Operator for Failing to Protect Customers' Trading Information (with Lofchie Comment)

The SEC charged Boston-based dark pool operator eBX LLC with failing to protect the confidential trading information of its subscribers and failing to disclose to all subscribers that it allowed an outside firm to use their confidential trading information. The SEC order states that eBX operates the alternative trading system LeveL ATS, and failed to disclose in required SEC filings that it allowed LeveL subscribers' unexecuted order information to be shared outside of LeveL.

Lofchie Comment: This disciplinary action raises some very serious questions as to the protection of customer trading information, even as to what information can permissibly be used. Firms that depend on others to keep their information confidential may want to review this case and consider whether they are confident that it is an isolated type of violation.

View order here (links externally to SEC website). See also: SEC Press Release.