NEW YORK, April 2 High-speed trading firm Virtu
Financial Inc delayed the launch of its initial public offering
this week as it awaits regulatory approval, which is expected
within days rather than weeks, a person familiar with the matter
The IPO will seek to raise $200 million to $250 million, for
a valuation of around $3 billion, the person said on Wednesday.
High-frequency trading has been under intense scrutiny in
recent days, following the release of author Michael Lewis' book
"Flash Boys: A Wall Street Revolt" on Monday.
Lewis alleges that the U.S. stock market is rigged, with
exchanges and alternative trading platforms favoring HFT firms,
which use their speed advantage to extract billions from the
The protagonist of "Flash Boys" is Brad Katsuyama, who led
the creation of a new exchange in November called IEX - for
Investors' Exchange - aimed in part at ensuring that HFT firms
have no special advantages over other brokers on the platform.
Virtu, one of the biggest U.S. HFT firms, is active in
making markets on IEX, taking the other side of trades to ensure
the market stays liquid.
Regulators, politicians, and other authorities have all
weighed in recently on HFT.
Federal U.S. investigators and the U.S. Securities and
Exchange Commission said this week they were investigating
possible wrongdoing by HFT firms. Two weeks ago, New York
state's Attorney General Eric Schneiderman said he believed U.S.
stock exchanges and other platforms provided HFT firms with
HFT is carried out by many banks and proprietary trading
firms using sophisticated computer programs to send high volumes
of orders into the market, executing a small portion of them
when opportunities arise to capitalize on price imbalances, or
to make markets.
HFT makes up more than half of all U.S. trading volume. The
firms are regulated, as are the exchanges they trade on.
(Reporting by John McCrank; Editing by Bernadette Baum)