Liquidnet Canada pays $600,000 for exposing trade data to foreign employees

Liquidnet Canada Inc. will pay a $600,000 penalty and $75,000 in costs following allegations that control weaknesses allowed foreign employees to access confidential Canadian trade information. The firm must also hire an independent consultant to review its controls. The Ontario Securities Commission alleged that in 2023, a deficiency in the fixed-income trading system exposed confidential trade information to certain foreign employees, followed by a similar issue in the equities trading systems in 2024. The regulator alleged that the firm was not forthcoming about the control weakness when it initially reported that it had halted trading for a systems upgrade. While the exposed information involved trade matches rather than indications of interest, the regulator noted that the personnel with access were not directly accountable to the commission. The Ontario Securities Commission imposed these sanctions to resolve allegations that the firm failed to protect confidential trade information and was not upfront with the regulator.