Wall Street Is Furious Over Rising Fines From SEC

livemint.com:

WASHINGTON—Wall Street is feeling the pain of inflation—at the tills of its regulators. Big banks and brokerage firms are handing over bigger checks to settle regulatory investigations, including those that don’t result in losses for investors. U.S.

market regulators are increasingly demanding tens of millions of dollars to settle technical violations that just a few years ago cost companies much less to resolve. This past week, the Securities and Exchange Commission sued Virtu Financial, one of the biggest electronic traders on Wall Street, over claims that some employees could have improperly viewed its clients’ confidential trading information. The SEC didn’t allege that Virtu misused the data.

The lawsuit noted that regulators couldn’t tell if the wrong traders ever saw the nonpublic records. The SEC settles most of its enforcement cases, and Wall Street firms prefer to pay fines and avoid litigation that would put more heat on executives. But SEC officials under Chair Gary Gensler are seeking higher fines to settle, even if prior offenders paid less.

In the Virtu case, the SEC sought a fine of more than $25 million, people familiar with the matter said, multiples of what similar prior cases fetched for the agency. The fine would have represented about 5% of Virtu’s net income last year. Virtu Chief Executive Douglas Cifu wrote in recent days on X, the platform formerly known as Twitter, that the SEC’s “offers to settle were not commercial" and he decided it was better to fight the regulator in court.