Bats Global Markets Inc., based in Lenexa, is in negotiations with U.S. regulators to settle accusations that Direct Edge, the stock exchange operator it bought in January, gave unfair advantages to high-frequency traders, according to reports by Bloomberg News and The Wall Street Journal.
The talks come two weeks after Bats announced that Bill O’Brien, Direct Edge’s CEO, was leaving. They also follow a Securities and Exchange Commission inquiry begun more than two years ago into key facets of modern markets, including order types — instructions for handling transactions that traders can send to exchanges. Critics allege that the fastest traders use the dozens of order types available at exchanges to disadvantage other investors.
Spokesmen for Bats and the SEC declined to comment on the reports, which quoted unnamed sources.
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