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High Frequency Trading firm Virtu Financial pursuing $314 mil IPO

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Investing.com -

Investing.com -- High-frequency trading firm Virtu Financial has resumed its effort to pursue an initial public offering with a plan to raise as much as $314 million through the sale, according to public filings.

The undertaking has been delayed by roughly a year after the plan was put on hold by the negative publicity generated by Michael Lewis' bestseller The Flash Boys. In the book, Lewis asserted that the HFT firms make tens of billions of dollars each year through its high-speed computers that allow them to lock in their trades ahead of the rest of the market.

Virtu will offer shares at $17-$19 apiece, Bloomberg reported, according to regulatory filings. At its highest estimate, Virtu will be valued at more than $2.5 billion on more than 135 million shares outstanding.

In 2014, Virtu generated $723 million in revenue, a nearly 9% increase from the previous year. The New York-based high-speed trading firm also took in $190 million in profits on the year, up from $182 million in 2013. Virtu had hoped to raise up to $100 million before Lewis' book hit the shelves last spring. During regulatory filings for its 2014 IPO, Virtu reported that it had made a profit in 1,277 of 1,278 of its previous trading days, according to Bloomberg.

Since the publication of Lewis' book, the industry has endured widespread scrutiny from state and federal regulatory agencies over the last year. In June, New York attorney general Eric Schneiderman filed a lawsuit against Barclays (LONDON:BARC), alleging that the British bank operated its dark pools in a way that favored high-frequency traders. In October, the U.S. Attorney's Office in the Northern District of Illinois indicted a high-frequency trader for allegedly manipulating the Commodities Futures Markets through trading on the Chicago Mercantile Exchange and European futures markets in 2011.

Then, last month the Securities and Exchange Commission (SEC) proposed a rule amendment that would require high-frequency traders to become members of the Financial Industry Regulatory Authority, better known as FINRA. The proposed amendment intends to provide greater regulatory oversight to the industry.

"This proposal embodies a simple but powerful principle of the Federal Securities laws - the protection of investors and the stability our markets require," SEC chair Mary Jo White said in a statement.

Virtu Financial LLC, one of the world's largest high-frequency trading firms, maintains operations in New York, Austin, Singapore and Dublin. Virtu is an active market maker across all major financial centers including equities, fixed income, currencies, futures and other commodities, according to its website, with asset classes in over 220 markets around the world.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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