NEW YORK (October 17, 2014) – After a four-year investigation by the U.S. Securities and Exchange Commission (SEC), Holland & Knight has secured a favorable outcome for a high-frequency trading firm based in New York City. The case was the SEC’s first-ever market manipulation case against a high-frequency trading firm.
The SEC claimed that the firm, using a special trading algorithm, manipulated the Nasdaq’s closing auction. The SEC alleged that the firm overwhelmed the market’s available liquidity and pushed the closing price of thousands of stocks higher or lower to its advantage. The SEC stated that the firm’s trading accounted for over 70 percent of total Nasdaq volume in selected stocks during a six-month period in 2009.
Holland & Knight partners Mitchell Herr and Aaron Goldberg employed a multi-pronged defense strategy, integrating legal defenses with a sophisticated market-impact analyses performed by outside experts. Ultimately, their client was able to settle the claims for $1 million and was not required to admit any wrongdoing.
About Holland & Knight’s SEC Enforcement Group: The SEC Enforcement Group has substantial experience handling securities investigations by the SEC and other regulators. With a former SEC regional trial counsel and more than a dozen former federal prosecutors, including the former chief of staff to the U.S. Attorney General, we advise clients based on a combination of extensive legal knowledge and a deep understanding of the government process obtained from our experience.
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