Citigroup will close its private stock trading venue next month.
The bank's LavaFlow platform, a type of market known as an electronic communications network, will shut down on Jan. 30, said Scott Helfman, a spokesman. The system was the sixth largest in the U.S. for trading larger stocks, according to data from the Financial Industry Regulatory Authority.
“Following a recent review of the LavaFlow ECN, we have decided that our capital, resources and efforts would be better redeployed to other areas within Citi's equities division,” Mr. Helfman said in an e-mail.
Citigroup has three dark pools, which will continue to operate after LavaFlow closes. Citi Cross, Citi Liquifi and Citi Match saw total market shares of 0.14%, 0.05% and 0.03%, respectively, in October, according to latest data from Rosenblatt Securities.
Citigroup agreed to pay $5 million in July to settle claims that LavaFlow failed to protect customers' confidential trading data, the Securities and Exchange Commission said at the time. The venue let an affiliate gain access to the system and use confidential information related to subscriber orders that weren't displayed to the public, the SEC said.
In August, the bank told regulators they could steer more stock trading to public exchanges by making it more affordable. In a letter to the SEC, Daniel Keegan, head of Americas equities at Citigroup, suggested the agency cut the highest amount that can be levied to trade by at least two-thirds. Most exchanges charge the maximum, 30 cents per 100 shares, leading traders to favor lower-cost dark pools, Mr. Keegan wrote.
