From November 2017 to May 2022, Virtu failed to establish, document, and maintain its system of risk management controls to demonstrate that it was reasonably designed to prevent the entry of erroneous orders and failed to establish, document, and maintain a system for regularly reviewing the effectiveness of its risk management controls and supervisory procedures. Specifically, Virtu did not reasonably document its system of risk management controls to demonstrate that certain controls were reasonably designed.

The Department of Enforcement alleges: 1. Respondent Gustave Schmidt failed to disclose compensation related to private placements that he brought to his firm and recommended to his clients, including a fee that exceeded the maximum disclosed amount in the offering documents by fifty percent. Despite this outsized compensation, Schmidt failed to have a reasonable understanding of the risks, rewards, and costs associated with the products he was recommending. 2. Between December 2020 and April 2021, while associated with Investment Network Inc.

From at least January 2016 through April 2022, NSI violated Regulation SHO Rule 200(f) and FINRA Rule 2010 by including securities positions of two affiliates when calculating the net positions of an independent trading unit. In addition, from at least January 2016 through April 2022, NSI violated FINRA Rules 3110 and 2010 by failing to establish and maintain a supervisory system that was reasonably designed to achieve compliance with Rule 200(f). For these violations, NSI is censured, fined $625,000, and required to certify that its business complies with Rule 200(f).

From September 2022 through March 2023, Laidlaw conducted a securities business while failing to maintain the required minimum net capital on at least 108 days and filed two inaccurate notices of net capital deficiency, in violation of Exchange Act §§ 15(c)(3) and 17(a), Exchange Act Rules 15c3-1 and 17a-11, and FINRA Rules 4110(b)(1) and 2010.