Market maker Virtu Financial Inc. said Tuesday it has launched a Freedom of Information Act (FOIA) lawsuit against its own regulator, the Securities and Exchange Commission, over the latter's failure to provide information about its rulemaking process and interactions of the chair with interested parties. Virtu said the suit was filed in the U.S. District Court of the Southern District of New York and that it's being represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP. Virtu said it submitted a FOIA request in June seeking to find out if the SEC's rulemaking process "included the legally required evaluation of potential investor harm and market risks, whether the SEC has solicited input from sufficiently broad sources and whether it had considered objective data before the Chair instructed the SEC staff to prepare new rule proposals for retail stock order handling and execution," the company said in a statement. After almost six months, it has not yet received a single responsive document from the SEC. T"he SEC's continued delay raises a significant concern and rather than speculating as to why basic information is being withheld, Virtu was compelled to initiate this action," said the statement. Specifically, the company is seeking to find out who the SEC has met with, the nature of the meetings and how they influenced the direction of the chair's proposals. The SEC is currently seeking to revamp how small retail orders are handled. Virtu shares were up 0.9% premarket, but have fallen 23% in the year to date, while the S&P 500 has fallen 17%.
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