shares of virtu financial are down more than 3 after the electronic trading firm disclosed friday that it is facing a potential enforcement lawsuit from the securities and exchange commission virtu disclosed in a quarterly filing after friday’s closing bell that it had engaged in settlement discussions with the sec about an investigation related to “information barriers policies and procedures” between january 2018 and april 2019 the company first disclosed the probe in february its updated disclosure suggested that the sec could be moving forward with a lawsuit virtu said it “currently believes it may receive a wells notice from the sec” referring to a type of letter that the agency’s staffers send to companies or individuals to inform them of a possible enforcement action a virtu spokesman said the investigation was “primarily focused on an access controls weakness in one of our internal back office systems containing post trade information that theoretically could allow certain system users access greater than what was intended by our policies” “we have no reason to believe and have found no evidence that anyone ever made any improper use of any client information he said virtu is best known as a socalled retail wholesaler meaning that it executes stock trades for online brokerages used by individual investors its chief executive douglas cifu has been a vocal critic of the sec’s proposals to overhaul the handling of small investors’ orders in march he sent the agency a letter warning that it was “poised to engage in a risky experiment” the sec’s investigation doesn’t involve virtu’s wholesaler arm a person familiar with the matter said but rather a business executing orders for institutional investors that virtu took over as part of its 2017 acquisition of kcg holdings the person said regulations and virtu’s own policies require this “agency execution” business to be kept separate from virtu’s proprietarytrading business wells notices aren’t a final indication that the sec will take an enforcement action against a company firms that receive wells notices are allowed to respond in writing and tell the sec why it shouldn’t proceed with a lawsuit the agency’s commissioners must also vote to authorize any enforcement settlement or litigation