Decision in brief: Ontario Securities Commission v Liquidnet, Enforcement Proceeding, Settlement, April 15, 2026

In this enforcement case, the OSC alleges that Liquidnet Canada Inc. broke Ontario securities law. The OSC says that Liquidnet allowed certain employees to see confidential orders and trading information on Liquidnet’s fixed income and equities alternative trading systems that they should not have been allowed to see. It is not clear whether those employees actually did so.

When Liquidnet first identified the problem with its fixed income trading system, it shut down its trading systems and notified the OSC. However, Liquidnet told the OSC that the shutdown was for system improvements and did not explain that the real reason was the access issue until a few months later. Liquidnet later discovered the same issue with its equities trading system and immediately reported it to the OSC.

Liquidnet and the OSC agreed to settle the case. They agreed that Liquidnet would pay an administrative penalty of $600,000 and costs of the OSC’s investigation of $75,000. They also agreed that Liquidnet would have an independent consultant, approved by the OSC, review its practices and procedures, and that Liquidnet would be reprimanded by the Tribunal.

In this hearing, the Tribunal decided that the proposed settlement was reasonable and in the public interest. The Tribunal found that Liquidnet's conduct was serious and that Liquidnet failed to maintain a robust compliance system. Liquidnet also failed to tell the Commission promptly about the full nature of the problem. On the other hand, Liquidnet has no earlier enforcement issues, and it has taken responsibility for its actions. The Tribunal approved the settlement.