A shareholder has taken legal action against several current and former officers and directors of Virtu Financial, Inc., including its CEO Douglas Cifu, alleging severe misconduct and breach of fiduciary duty.
The lawsuit filed by plaintiff Theodore Adams claims that Virtu Financial's executives failed to protect sensitive client trading information from being accessed by unauthorized personnel within the company. According to Adams, this lack of security measures allowed proprietary traders at Virtu to view confidential data from their execution services clients, which could have been used for unfair trading advantages. The plaintiff alleges that from January 2018 through April 2019, Virtu's systems stored sensitive customer trade execution details without adequate access restrictions. These details included customer identities, transaction sides (buy or sell), execution prices and volumes, and trading algorithms used for orders.
Adams contends that despite public assurances from CEO Douglas Cifu about safeguarding client information with physical and logical barriers, these promises were not upheld. Instead, employees reportedly accessed sensitive databases using generic usernames and passwords widely known within the company. The complaint highlights several instances where internal communications revealed concerns about database access limitations being exceeded due to multiple users logging in simultaneously with shared credentials.
Adams is demanding damages for losses incurred due to these alleged breaches of fiduciary duty. He is also calling for changes in corporate governance practices to prevent future misconduct.
The case was filed in the United States District Court for the Eastern District of New York under Case No. 1:25-cv-1688 and is presided over by Judge Nicholas G. Garaufis.