U.S. securities regulators have fined Liquidnet Inc. US$2 million, over allegations that it improperly shared subscribers’ trading data within the firm.

The U.S. Securities and Exchange Commission (SEC) said Friday it has charged Liquidnet, which operates a dark pool, with improperly using subscribers’ trading information in order to help it market other services. The SEC said that its investigation found that the firm allowed employees on its equity capital markets (ECM) desk to access the trading data of its dark pool subscribers, which was then used in marketing presentations to prospective ECM clients, such as corporate issuers, and private equity and venture capital firms.

The SEC says that the ECM employees would provide issuers with information on ATS subscribers who had recently indicated interest in buying or selling their stock. The data was also used to advise issuers about which institutional investors they should meet during investor conferences or roadshows. And, it says the data was used to advise ECM clients when they should execute transactions, given the liquidity they could see in the dark pool.

The firm agreed to settle the allegations, without admitting or denying the SEC’s findings. It consented to the SEC’s order, which censures the firm, imposes a US$2 million penalty, and orders it to cease and desist from committing the violations.

“Dark pool operators violate the law when they fail to protect the confidential trading information that their subscribers entrust to them, as Liquidnet did here when it used this confidential information to try to expand its business,” said Andrew Ceresney, director of the SEC Enforcement Division. “We will continue to aggressively police broker-dealers who operate an ATS and fail to rigorously ensure the protection of confidential trading information.”

The case comes in the wake of a speech Thursday from SEC chairwoman Mary Jo White signalling that the agency is currently contemplating a variety of market structure reforms, including a possible rule to expand the reporting requirements for alternative trading systems.