The bank’s decision to close the unit comes after the Securities and Exchange Commission alleged in July that LavaFlow failed to safeguard customer data from March 2008 through March 2011.
The unit is said to have agreed to pay $5m, in addition to a $2.85m penalty in order to close the matter.
Citigroup said: "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."
An alternative trading system (ATS), LavaFlow electronically matches buy and sell orders for listed stocks.
As per the latest data released by the Financial Industry Regulatory Authority (FINRA), it is the sixth largest ATS for stocks for the week of 10 November, reports Reuters.
In addition to LavaFlow, Citigroup operates at least three trading platforms, Citi Cross, Citi March and LIQUIFI, which are referred to as ‘dark pools’.
Image: Citigroup EMEA headquarters, Canary Wharf, London. Photo: courtesy of Arpingstone
