Virtu Financial ($VIRT) — Massive insider sell-off, should investors sell too?

Co-president Brett Fairclough and the Co-COO sold 57% of their holdings in the company just a few days ago. Largest sale prior to this was the executive VP of Markets & Global Head of Excution Services Stephen Cavoli who sold $2.6 million worth of shares. Overall, insiders sold more shares than they bought in the past 12 months.

I guess the company is facing a potential enforement lawsuit from the SEC (which probably means they are already). They've engaged in settlement discussions with the SEC's investigation related to their “information barriers policies and procedures” between Jan 2018 and April 2019 along with receiving a “Wells notice” from the SEC which again, probably already happened.

This looks and smells like insider trading.

Why else would they elect to sell this amount after the company's disclosing the SEC's investigation? And of course, the CEO bought shares to quell any speculation but to me, the damage is done. I think there's something going on with this company that the public doesn't know about and when it comes to light, it will severely impact the stock price and these guys know. I feel like this is enough information to be bearish on the stock however, I'm not sure if I'm just over thinking this.

What do you think?

Sources:

https://www.businesswire.com/news/home/20230505005297/en/Bronstein-Gewirtz-Grossman-LLC-Notifies-Shareholders-of-Virtu-Financial-Inc.-VIRT-Investigation

https://simplywall.st/stocks/us/diversified-financials/nasdaq-virt/virtu-financial/news/the-co-president-co-coo-of-virtu-financial-inc-nasdaqvirt-br

https://www.wsj.com/livecoverage/stock-market-today-dow-jones-05-01-2023/card/virtu-stock-falls-after-disclosure-of-potential-sec-enforcement-action-w8oxzdAvCUYsPpvvpSDn

Class Action:

https://www.benzinga.com/pressreleases/23/05/g32224227/shareholder-alert-pomerantz-law-firm-investigates-claims-on-behalf-of-investors-of-virtu-financial?fbclid=IwAR3YyRf_TYUMBedP21iwbrlhE_1tV1lH09so19Gx8A0XIdcypSyatOxAtbs

Exec Resigning 2 weeks ago:

https://finance.yahoo.com/news/1-trading-firm-virtu-says-144330189.html

TLDR:

Virtu top execs are selling off their holdings in the company a week after disclosing the SEC's investigation into the company. This looks extremely suspicious. I don't think any of this is priced in either. Looking for clairification if I'm over thinking this or not.