Latour Trading LLC, a New York-based high-frequency trading firm, agreed Wednesday to pay a $16 million penalty to resolve U.S. regulatory claims that it didn't hold enough capital for how much it was trading.
Latour Trading failed to maintain minimum levels of net capital on 19 of 24 reporting dates over a two-year period, the Securities and Exchange Commission said.
"This record sanction reflects the seriousness of Latour's violations of the net capital rule, which is a critical broker-dealer financial responsibility requirement," said Andrew Ceresney, the SEC's director of enforcement.
During the period of the violations, Latour's trading at times accounted for as much as 9 percent of the trading volume in equity securities for the entire U.S. market, according to the SEC. The $16 million penalty is the largest ever for violation of the net capital rule, the agency said.
Nicolas Niquet, Latour's former chief operating officer, agreed to pay $150,000 as part of the SEC's investigation. Latour and Niquet didn't admit or deny wrongdoing in settling the SEC's allegations.
Harry Weiss, a defense attorney in the investigation, didn't immediately return a phone call seeking comment.