(Adds how Virtu makes money, regulatory investigations)
By Herbert Lash
NEW YORK, Feb 20 (Reuters) - Virtu Financial Inc IPO-VIRT.O, a trading firm whose plans to go public were postponed last year amid the furor over high-frequency trading, has filed a new prospectus for an IPO, a U.S. regulatory filing on Friday showed.
Virtu Financial said it plans to raise $100 million by listing on Nasdaq, though that figure is an estimate used to calculate the registration fee with the U.S. Securities and Exchange Commission.
Last year the company, which will be controlled by its founder Vincent Viola, a former chairman of the New York Mercantile Exchange, sought to raise about $200 million to $250 million, valuing the firm at about $3 billion.
The prospectus for the first IPO was filed in March 2014, but was postponed a month later after Michael Lewis’ book “Flash Boys: A Wall Street Revolt,” questioned whether markets were rigged in favor of high-frequency traders.
Virtu Financial also caused a furor after the firm revealed in its prospectus it had only one day of trading losses in five years, which now stretches to almost six years. The detail was meant to show the firm’s profitability, but opponents of high-frequency trading said it was a sign high-speed traders posses unfair advantages.
The company is a market maker that earns small sums of money by making the “spread” - the difference between what buyers or sellers are willing to pay or accept in a transaction. In 2014 it averaged about 5.3 million trades daily across 225 markets worldwide.
Last year Virtu said it wins 51 percent to 52 percent of its trades, leading many people to question the source of its profitability as they believed it lost the rest. But the remainder also includes trades that break-even, suggesting its win-loss ratio is closer to 2:1.
Friday’s prospectus said Virtu profitably exited 49 percent of positions.
The company said in connection with media attention, along with other broker-dealers and trading firms, it has been the subject of requests for information and documents from the SEC and the New York attorney general. Virtu said it has been cooperating and complying with those requests.
Goldman Sachs Group Inc, JPMorgan Chase & Co and Sandler O’Neill + Partners LP are the underwriters for the offering, among others.
Reporting by Herbert Lash; Editing by Lisa Shumaker, Bernard Orr