L iquidnet Canada's fixed income trading remains suspended following a shutdown on August 29, 2023. The suspension was triggered by failures in shared technology infrastructure that allowed employees at US and UK affiliates to view confidential order and trade information belonging to Canadian marketplace participants.
Related Brief 1d ago
regulatory enforcement 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.
This data visibility issue first emerged in mid-2023 on Liquidnet's fixed income alternative trading system. By June 30, the firm identified that Canadian staff could access client data from its US affiliate, and foreign affiliate employees could view information from Canadian participants.
Related Brief 1d ago
securities fraud SEC recovers $1.3 million from Spartan Trading fraud scheme
The estate of Richard Myre is now jointly liable for up to $695,000 of a total $1.3 million disgorgement order against Spartan Trading Company LLC. This follows a settlement between the estate and the U.S. Securities and Exchange Commission (SEC). The SEC had alleged that Spartan Trading, an unregistered investment fund, raised more than $3.7 million from investors between 2019 and 2023. The fund misappropriated investor money rather than trading it as promised. Investors received false account statements claiming the fund was profitable when it was doing very little trading and often losing money. The founders of the fund, Richard Myre, Dale Dahmen, and Dominick Dahmen, were found shot dead in a pickup truck in early 2023 in what local law enforcement described as a double murder-suicide. The SEC filed a complaint in U.S. district court in Minnesota. A default judgment against the Dale Dahmen estate ordered it to pay almost $700,000 in disgorgement and interest. The estate of Richard Myre agreed to a final judgment without admitting or denying the allegations. The estate of Richard Myre is jointly liable with Spartan Trading for disgorgement of the scheme's ill-gotten gains.
Liquidnet initially described the shutdown as August 29 as a routine system enhancement. The firm did not disclose to the Ontario Securities Commission that the suspension was caused by cross-border data visibility until November 1, 2023.
Related Brief 1d ago
cybersecurity Kraken Refuses Ransom After Insider Breach Exposes 2,000 Accounts
Two thousand Kraken clients face the risk of their private data being leaked on social media. The exposure occurred after two support employees were recruited by a cybercrime group to gain improper access to internal systems. These employees recorded videos of internal systems containing client support data for 2,000 accounts, or 0.02% of the user base. Kraken revoked employee access and strengthened controls following a tip in February 2025. A criminal group subsequently threatened to release the videos to media outlets and social media unless payment was made. Kraken refused to pay or negotiate with the ransom demands. A criminal investigation is underway to identify and arrest the responsible individuals. 2,000 clients face the risk of their private data being leaked on social media.
Liquidnet Canada breached confidentiality obligations under National Instrument 21-101, which governs marketplace operations in Canada.
Related Brief 2d ago
financial regulation A financial watchdog has cut off access to funds for 13 alleged terrorism-linked entities, exposing how corporate accounts can channel illicit flows before detection.
Capital Market Operators across Nigeria must now freeze all assets tied to 13 newly blacklisted entities linked to terrorism financing, cutting off financial channels before further harm occurs. The Securities and Exchange Commission (SEC) issued a binding directive requiring immediate identification and freezing of funds, without prior notice, for 10 individuals and three entities added to the Nigeria Sanctions List. These individuals were convicted in April 2019 by the Abu Dhabi Federal Court of Appeal for collecting money in Dubai and transferring it to Nigeria to support Boko Haram operations, with sentences ranging from 10 years to life. The SEC’s authority stems from section 49 of the Terrorism (Prevention and Prohibition) Act, 2022, which mandates asset freezes on designated persons and organizations. All CMOs and Designated Non-Financial Businesses and Professions (DNFBPs) must report frozen assets and blocked transactions to the Nigeria Sanctions Committee Secretariat. Institutions that fail to comply face civil and criminal penalties, along with severe reputational consequences. The SEC emphasized that the mechanism is preventive, not punitive, designed to disrupt the use of corporate vehicles in moving illicit funds through the financial system. Non-compliance carries civil and criminal liabilities, as well as reputational damage for institutions.
To settle the charges, the Capital Markets Tribunal approved a settlement requiring the firm to pay a C$600,000 administrative penalty and C$75,000 in investigation costs. The firm must also undergo an independent compliance review and accept an oral reprimand.
Related Brief 3d ago
law firm lateral hires Seward & Kissel expands regulatory and enforcement capabilities through lateral partner additions
Seward & Kissel LLP is now positioned to advise clients through the full regulatory lifecycle, from structuring transactions and complying with securities rules to managing examinations, investigations, and enforcement actions. This capability is the result of the added expertise of partners Adriana Schwartz and Hannah Thibideau, who joined the firm's New York office. Adriana Schwartz joins the Investment Management group, focusing on securities law regulatory and compliance and trading issues for passive and activist investors, including Section 13(d) and Section 16 compliance. She also represents clients in private investments in public equity (PIPEs), registered direct offerings, and special‑purpose acquisition companies (SPACs). Hannah Thibideau joins the Litigation & Investigations group, focusing on regulatory enforcement and white-collar criminal defense in investigations brought by the U.S. Securities and Exchange Commission, the Department of Justice, and the Department of Justice, and FINRA. She also advises registered investment advisers and private funds on anti‑money laundering and sanctions compliance. The arrivals of Schwartz and Thibideau follow the March addition of Craig Warkol, who joined as chair of the Litigation & Investigations group, and the arrivals of Randall Adams and Mark Garibyan in the second half of 2025. Together, this group brings experience spanning SEC examinations, DOJ investigations, and capital markets activity.
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