Pipeline's

The company also said Friday that it will no longer give Milstream access to Pipeline's so-called "block market," which caters to institutional investors looking to trade large chunks of stocks at once, without being detected by competitors.

Pipeline to Cut Ties With Subsidiary Jenny Strasburg 2011

But according to the SEC, a Pipeline entity called Milstream Strategy Group LLC used streams of information from Pipeline Trading Systems to help predict what shares Pipeline's customers were trying to buy and sell.

Pipeline Financial's Top Officers Leave in Wake of 'Dark Pool' Case Scott Patterson 2011

The set-up created a conflict of interest, according to the SEC, although traders working for Milstream were paid using a formula that rewarded them for offering favorable prices to Pipeline's customers.

'Dark Pool' Settlement Shines Light on Potential Abuses Jacob Bunge 2011

The SEC announced the settlement, and Pipeline's agreement to pay $1.2 million in civil fines, last month.

Pipeline to Cut Ties With Subsidiary Jenny Strasburg 2011

Milstream officials were notified Thursday about the decision to cut Milstream off from Pipeline's dark pool.

Pipeline to Cut Ties With Subsidiary Jenny Strasburg 2011

Milstream, according to regulators, tried to predict what shares Pipeline's customers might buy or sell, and made similar trades on other markets before filling customer orders on the Pipeline platform.

'Dark Pool' Settlement Shines Light on Potential Abuses Jacob Bunge 2011

Rosenblatt Securities estimated that in September an average 3.1 million shares traded per day on Pipeline's systems, down 59% from September 2010.

'Dark Pool' Settlement Shines Light on Potential Abuses Jacob Bunge 2011

The fines stemmed from SEC allegations that Pipeline's "dark pool" trading platform improperly shared customers' orders with Milstream, which in turn traded on that information.

Pipeline Financial Fires Staff of Subsidiary Jenny Strasburg 2011

The complaint from the SEC on Monday said that clients of Pipeline's private market nearly all the time wound up trading with an entity called Milstream Strategy Group LLC, an affiliate of Pipeline.

'Dark Pool' Settlement Shines Light on Potential Abuses Jacob Bunge 2011

"A majority of Pipeline clients have told us they are not comfortable trading in the Block Market as long as Milstream is given access," Jay Biancamano , Pipeline's new executive chairman, said in a statement Friday.

Pipeline to Cut Ties With Subsidiary Jenny Strasburg 2011