ITG Securities Settlement

You or someone in your family may have purchased or otherwise acquired shares of ITG common stock between February 28, 2011 and August 3, 2015, inclusive.

If this description applies to you, you have a right to know about a proposed settlement of this class action lawsuit, and about all of your options, before the Court decides whether to approve the Settlement and Plan of Allocation. If the Court approves them, and after any objections or appeals are resolved, the Claims Administrator appointed by the Court will make the payments that the Settlement allows.

The Notice explains the lawsuit, the Settlement, the Plan of Allocation, your legal rights, what benefits are available, who is eligible for them, and how to receive them.

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On August 5, 2015, a class action lawsuit was filed on behalf of the Class against ITG, Robert C. Gasser, and Steven Vigliotti for allegedly violating §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder. On October 15, 2015, the Court appointed Metzler as Lead Plaintiff and Motley Rice as Lead Counsel pursuant to the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). Thereafter, on December 14, 2015, Lead Plaintiff filed its Consolidated Amended Class Action Complaint for Violations of the Federal Securities Laws against ITG, Gasser, Vigliotti, and Mats Goebels (“CAC”). The CAC alleged that, during the Class Period, these defendants failed to disclose a proprietary trading pilot project at ITG, called “Project Omega,” that was operating in connection with ITG’s alternative trading system, called POSIT. According to the CAC, ITG told shareholders and clients that their trades in POSIT were confidential and anonymous, and highlighted ITG’s reputation for independence, integrity, and POSIT’s confidentiality while not disclosing that Project Omega had accessed confidential customer data. Lead Plaintiff further alleged that, when ITG finally disclosed Project Omega, it was only in connection with a settlement and Consent Order with the U.S. Securities & Exchange Commission (“SEC”), under which the Company agreed to pay a $20 million fine, and that the price of ITG common stock declined following the announcement of that settlement, allegedly damaging the Class.

The defendants named in the CAC deny Lead Plaintiff’s allegations and, on February 16, 2016, they moved to dismiss the CAC. On April 26, 2017, the Court granted the motions to dismiss in part (dismissing the claims against Vigliotti and Goebels) and denied them in part (ruling that the claims against ITG and Gasser could proceed as to certain of the alleged misstatements).

On June 12, 2017, Lead Plaintiff filed a Motion for Leave to File a Second Amended Class Action Complaint seeking to reinstitute claims against Vigliotti and Goebels (the “Motion to Amend”). On March 23, 2018, the Court denied Lead Plaintiff’s Motion to Amend.

While the Motion to Amend was pending before the Court, the Parties agreed to engage in settlement discussions with the assistance of a mediator. On October 6, 2017, the Parties participated in a full-day mediation session before David Geronemus, an experienced and respected expert in dispute resolution. The Parties were unable to reach a settlement on that day, but continued settlement discussions, assisted by Mr. Geronemus. The Parties ultimately reached an agreement in principle to settle the Action for $18,000,000 and, on April 19, 2018, executed the Term Sheet memorializing the Parties’ agreement.

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In a class action, one or more people called class representatives sue on behalf of people who have similar claims. All of these people who have similar claims are referred to collectively as a “Class” or individually as “Class Members.” One court resolves the issues for all Class Members, except for those who exclude themselves from the Settlement. The Honorable John F. Keenan of the United States District Court for the Southern District of New York is the judge overseeing this class action. The case is known as In re Investment Technology Group, Inc. Securities Litigation, Civil Action No. 15 Civ. 6369 (JFK) (S.D.N.Y.) (the “Action”).

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The Court has not yet entered final judgment in favor of Lead Plaintiff or Defendants. Instead, with the assistance of a mediator, the Parties agreed to a settlement of all pending claims in the Action. The Settlement will end all the claims against Defendants in the Action and will avoid the uncertainties and costs of further litigation and any future trial. Affected investors will be eligible to receive compensation immediately, rather than after the time it would take to resolve future motions, conduct discovery, have a trial, and exhaust all appeals. Lead Plaintiff and its counsel think the Settlement is in the best interests of the Class.

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The Class includes all persons and entities who purchased or otherwise acquired the common stock of Investment Technology Group, Inc. during the period from February 28, 2011 through and including August 3, 2015 (the “Class Period”), and who were damaged thereby.

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The following persons and entities are excluded from the Class: Defendants, Vigliotti, and Goebels; ITG’s affiliates and subsidiaries; the officers and directors of ITG and its affiliates and subsidiaries at all relevant times; members of the immediate family of any excluded person; heirs, successors, and assigns of any excluded person or entity; and any entity in which any excluded person has or had a controlling interest.

If you own shares of a mutual fund that purchased shares of ITG common stock during the Class Period, that alone does not make you a Class Member.

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If you are still not sure whether you are included, you can ask for free help. For more information, you can contact the Claims Administrator, GCG, by phone at (888) 312-0818, by e mail to Info@ITGSecuritiesSettlement.com, or you can fill out and return the claim form described in Question 10, to see if you qualify. Do not contact Defendants or their counsel.

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Defendants have agreed to pay $18,000,000 in cash into the Settlement Fund. The balance of this fund, after payment of court-approved attorneys’ fees and expenses, taxes, and the costs of claims administration, including the costs of printing and mailing the Notice and the cost of publishing notice (the “Net Settlement Fund”), will be divided among all Class Members who submit valid claim forms.

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If you are entitled to a payment, your share of the Net Settlement Fund will depend on the number of valid claim forms that Class Members submit, how many shares of ITG common stock you purchased and at what price(s), and when you bought and sold your ITG shares. By following the Plan of Allocation described in the Notice, you can calculate your “Recognized Claim.” The Claims Administrator will distribute the Net Settlement Fund according to the Plan of Allocation after the deadline for submission of Claim and Release forms has passed.

The Claims Administrator will determine each Class Member’s pro rata share of the Net Settlement Fund based upon each Class Member’s valid “Recognized Claim.” The Recognized Claim formula is not intended to be an estimate of the amount that a Class Member might have been able to recover after a trial; it also is not an estimate of the amount that will be paid to Class Members pursuant to the Settlement. The Recognized Claim formula is the basis upon which the Net Settlement Fund will be proportionately allocated to the Class Members with valid claims.

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To qualify for payment, you must be an eligible Class Member and you must submit a Claim and Release form. Read the instructions carefully, fill out the form, include all the documents the form requests, sign it, and mail it in an envelope postmarked no later than April 4, 2019. Retain a copy of everything you mail, in case the materials are lost or destroyed during shipping.

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The Court will hold a hearing on February 21, 2019, to decide whether to approve the Settlement. If the Court approves the Settlement, there may be appeals. The outcome of any appeal, if it is filed, is always uncertain, and resolving appeals can take time, potentially several years. In addition, the Claims Administrator must process all of the Claim and Release forms. The processing is complicated and will take many months. Please be patient.

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Unless you exclude yourself, you are staying in the Class, and that means that you cannot sue, continue to sue, or be part of any other lawsuit against the Defendants or the Defendant Released Parties (defined below) concerning or relating to the claims being released in this Settlement. It also means that all of the Court’s orders in this case will apply to you and legally bind you and you will release your claims in this case against the Defendants and the other Defendant Released Parties.

Pursuant to the proposed Settlement, and on the Effective Date, Lead Plaintiff and other members of the Class who do not exclude themselves will release and forever discharge, and will forever be enjoined from prosecuting, the Settled Claims (defined below) against the Defendant Released Parties.

“Defendants” are Investment Technology Group, Inc. and Robert C. Gasser, both of whom will be released from all Settled Claims. The proposed Settlement will release all Settled Claims against each Defendant and the other Defendant Released Parties.

“Defendant Released Parties” means any and all defendants named in any of the complaints filed in the Action and any and all of their related parties, including, without limitation, any and all of their past or present parents, subsidiaries, affiliates, predecessors, or successors, as well as any and all of its or their current or former officers, directors, employees, associates, members of their immediate families, agents or other persons acting on their behalf, underwriters, insurers, reinsurers, attorneys, advisors, financial advisors, publicists, independent certified public accountants, auditors, accountants, assigns, creditors, administrators, heirs, estates, or legal representatives.

“Settled Claims” means any and all manner of claims, actions, causes of action, potential actions, suits, controversies, costs, damages, losses, obligations, liabilities, judgments, and demands whatsoever, known or unknown, suspected or unsuspected, accrued or unaccrued, whether class, individual, or otherwise, arising under the laws, regulations, or common law of the United States of America, any state or political subdivision thereof, or any foreign country or jurisdiction, in law, in contract, or in equity, and regardless of legal theory, and including claims for indemnification, contribution, or otherwise denominated, that Lead Plaintiff or any other member of the Class: (i) asserted in any complaint filed in the Action or (ii) could have asserted in any forum that arise out of or are based upon, in whole or in part, directly or indirectly, any allegations, transactions, facts, matters, occurrences, representations, actions, omissions, failures to act, statements, or disclosures involved, set forth, or referred to in any complaint filed in the Action and that relate in any way to the purchase, sale, or holding of ITG common stock during the Class Period. Notwithstanding the foregoing, excluded from the definition of “Settled Claims” are: (1) claims to enforce the Settlement; (2) the derivative claims asserted on behalf of ITG in the action styled Watterson v. Gasser, et. al, Index No. 653933/2105 (Sup. Ct. N.Y. Cty.); provided, however, that any individual claim of any plaintiff in such action as a Class Member will not be excluded from the definition of “Settled Claims” (Defendants represent that, to the best of their knowledge, the action expressly referenced above is the only derivative action currently pending against former and/or current officers and directors of ITG relating to their service on behalf of ITG); and (3) claims that solely arise out of or are premised upon (a) the “potential resolution” (or any subsequent actual resolution) of the SEC investigation disclosed in the Company’s August 8, 2018 Form 10-Q regarding “the operational features of the U.S. POSIT alternative trading system and access to U.S. POSIT data, together with certain related disclosures” (the “2018 POSIT Settlement”), or (b) the alleged conduct giving rise to the alleged securities law violations resolved in the 2018 POSIT Settlement, including the conduct expressly identified by ITG in the first full paragraph of page 25 of the Company’s August 8, 2018 Form 10-Q.

“Unknown Claims” means (i) any and all Settled Claims which Lead Plaintiff or any other Class Member, or each of their agents or attorneys, or their current or former officers, directors or employees, does not know or suspect to exist in his, her or its favor at the time of the release of such claims, and (ii) any Settled Defendants’ Claims which any Defendant or each of their agents or attorneys, or their current or former officers, directors or employees, does not know or suspect to exist in his, her, or its favor at the time of the release of such claims, which in the case of both (i) and (ii) if known by him, her or it, might have affected his, her or its decision(s) with respect to this Settlement, including, without limitation, his, her or its decision not to object to this Settlement, or not to exclude himself, herself or itself from the Class. With respect to any and all Settled Claims, the Parties stipulate and agree that, upon the Effective Date of the Settlement, Lead Plaintiff and Defendants shall expressly waive, and each of the other Class Members and each of the other Released Parties shall be deemed to have waived, and by operation of the Judgment, shall have expressly waived, any and all provisions, rights, and benefits conferred by any law of any state or territory of the United States, or principle of common law or foreign law, which is similar, comparable, or equivalent to California Civil Code § 1542, which provides:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Lead Plaintiff and Class Members acknowledge, and shall be deemed by operation of law to have acknowledged, that they may hereafter discover facts in addition to, or different from, those facts which they know or believe to be true with respect to the subject matter of this Settlement, but that it is their intention to release and settle fully, finally, and forever any and all of the Settled Claims, subject to the terms and conditions provided herein, and in furtherance of such intention, the Releases shall be and remain in effect notwithstanding the discovery or existence of any such additional or different facts. Lead Plaintiff and Defendants acknowledge, and each of the other Class Members and each of the other Released Parties shall be deemed by operation of law to have acknowledged, that the foregoing waiver was separately bargained for and a key element of the Settlement.

If the proposed Settlement is approved by the Court and becomes final, all Settled Claims will be dismissed on the merits and with prejudice as to all Class Members who do not exclude themselves from the Class.

If the Settlement becomes final, all Defendants will release all Settled Defendants’ Claims against Lead Plaintiff, Class Members, and their counsel.

“Settled Defendants’ Claims” means any and all claims, including Unknown Claims, that Defendants asserted, or could have asserted, against the Plaintiff Released Parties that arise out of or relate in any way to the institution, prosecution, or settlement of the Action, except for claims relating to the enforcement of the Settlement. Notwithstanding any other provision to the contrary herein, Settled Defendants’ Claims shall not include any claims by the Defendant Released Parties against any Insurer.

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If you do not want a payment from this Settlement, and you want to keep the right to sue or continue to sue the Defendants or the Defendant Released Parties on your own about the same claims being released in this Settlement, then you must take steps to exclude yourself from the Settlement. This is referred to as “opting out” of the Class.

To exclude yourself from the Settlement, you must send a letter by mail stating that you want to be excluded from In re Investment Technology Group, Inc. Securities Litigation, Civil Action No. 15 Civ. 6369 (JFK) (S.D.N.Y.). You must include your name, address, daytime telephone number, e-mail address, your signature, and proof of the number of shares of ITG common stock purchased or otherwise acquired during the Class Period, the number sold, if any, the dates of such purchases and sales, and the price paid or received per share for each such purchase, acquisition, or sale.

Your Request for Exclusion must be sent to:

ITG Securities Settlement EXCLUSIONS c/o GCG P.O. Box 10602 Dublin, OH 43017-9202

Please keep a copy of everything you send by mail, in case it is lost or destroyed during shipping.

Your Request for Exclusion must be received no later than January 31, 2019. You cannot exclude yourself by phone, facsimile, or e-mail. If you ask to be excluded, you are not eligible to receive any Settlement payment, and you cannot object to the Settlement. By excluding yourself, you will not be legally bound by anything that happens in this lawsuit and you may be able to pursue the claims that are being released in this Settlement, subject to any defenses.

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No. Unless you exclude yourself, you give up any right to sue the Defendants or the Defendant Released Parties for the claims being released by this Settlement. If you have a pending lawsuit relating to the claims being released in this case against any of the Defendants, speak to your lawyer in that case immediately and give him/her the Notice you received. Remember, the exclusion deadline is January 31, 2019.

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No. If you exclude yourself, you cannot send in a Claim and Release form. But you may sue, continue to sue, or be part of a different lawsuit asserting the claims being released in this Settlement against the Defendants or the other Defendant Released Parties.

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The Court appointed Motley Rice to represent you and the other Class Members as Lead Counsel. You will not be individually charged for these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense.

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Lead Counsel will apply to the Court for attorneys’ fees not to exceed 25% of the $18,000,000 Settlement Fund and for reimbursement of Lead Counsel’s out-of-pocket expenses up to $275,000 (exclusive of costs for notice and administration of the Settlement), which they paid or are payable in this litigation, plus interest on these two amounts at the same rate as earned by the Settlement Fund. Lead Counsel’s fee and expense application also may include a request for an award to Lead Plaintiff for reimbursement of its reasonable costs and expenses, including lost wages, directly related to their representation of the Class in an amount not to exceed $2,000. The amounts approved by the Court will be paid from the Settlement Fund. Class Members are not personally liable for any fees or expenses of Lead Counsel.

In this type of litigation, it is customary for plaintiff’s counsel to be awarded a percentage of the common fund recovered as attorneys’ fees. The attorneys’ fees and expenses requested will be the only payment to Lead Counsel for its efforts in achieving this Settlement and for its risk in undertaking this representation on a wholly contingent basis. To date, these counsel have not been paid for their services of conducting this litigation on behalf of the Class or for their substantial out-of-pocket expenses. The fee requested will compensate Lead Counsel for their work in litigating the case and reaching the Settlement. The request is within the range of fees awarded to class counsel under similar circumstances in other cases of this type. The Court, however, may award less than this amount.

If the above amounts for fees and expenses are requested and approved by the Court, the average cost per share of common stock for fees, expenses, and other awards will be approximately $0.24.

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If you are a Class Member, you can object to the Settlement if you do not like any part of it. To object, you must state in writing that you object to the Settlement, Plan of Allocation, or fee and expense application in In re Investment Technology Group, Inc. Securities Litigation, Civil Action No. 15 Civ. 6369 (JFK) (S.D.N.Y.). You also must provide certain other information in connection with any objection: (a) your name, mailing address, daytime telephone number, and e-mail address; (b) the reason(s), if any, for the objection, including any legal support and/or evidence, including witnesses, that you wish to bring to the Court’s attention or introduce in support of such objection; (c) the number of shares of ITG common stock you owned as of the beginning of trading on February 28, 2011 (the first day of the Class Period); (d) the date(s), price(s), and number(s) of shares of all purchases, acquisitions and sales of ITG common stock you made during the Class Period; and (e) appropriate documentation of such purchases, acquisitions, and sales.

In order to be considered, an objection also must be signed by the Class Member making the objection. You cannot object by phone, facsimile, or e-mail.

The Parties may take discovery of any Class Member who submits an objection on issues related to the Settlement.

Any objection to the Settlement must be mailed or delivered such that it is received by each of the following parties no later than January 31, 2019:

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Objecting is simply telling the Court that you do not like something about the Settlement, the Plan of Allocation, or the application for attorneys’ fees and expenses. You can object only if you stay in the Class. Excluding yourself is telling the Court that you do not want to be part of the Settlement. If you exclude yourself, you have no basis to object because the case no longer affects you.

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The Court will hold a hearing on February 21, 2019, at the United States District Court for the Southern District of New York, 500 Pearl Street, Courtroom 20C, New York, NY 10007. At this hearing the Court will consider whether the Settlement and the Plan of Allocation are fair, reasonable, and adequate and should be approved. Additionally, the Court also will consider Lead Counsel’s application for attorneys’ fees and reimbursement of expenses. The Court may change the date and time of the hearing without further notice. Class Members are advised to check this website or PACER (www.pacer.gov), as described in Question 24, to confirm that the date of the hearing has not been changed. If there are objections, the Court will consider them. The Court will listen to people who have requested in writing by January 31, 2019 to speak at the hearing.

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No. Lead Counsel will answer any questions the Court may have. You are welcome, however, to attend at your own expense. If you send an objection, you do not have to come to Court to talk about it. As long as your written objection is received on time, the Court will consider it. You may also pay your own lawyer to attend, but this is not required.

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You may ask the Court for permission to speak at the hearing. To do so, you must send a letter stating your intention to appear in In re Investment Technology Group, Inc. Securities Litigation, Civil Action No. 15 Civ. 6369 (JFK) (S.D.N.Y.). Be sure to include your name, address, telephone number, your signature, the number of shares of ITG common stock you purchased or otherwise acquired during the Class Period, the number of shares you sold, and the dates of the purchases/acquisitions and sales. Your notice of intention to appear must be received no later than January 31, 2019, and be sent to the Clerk of the Court, Lead Counsel, and Defendants’ Counsel’s Representatives, at the addresses listed in Question 18. You cannot speak at the hearing if you exclude yourself from the Settlement.

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If you do nothing, you will receive no money from this Settlement. But, unless you exclude yourself, you will not be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit against the Defendants or the other Defendant Released Parties about the same claims being released in this Settlement.

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The Notice summarizes the proposed Settlement. More details are in the Amended Stipulation and Agreement of Settlement (“Stipulation”) dated October 26, 2018. You can view and print the Stipulation here, or obtain a copy of the Stipulation or more information about the Settlement by contacting the Claims Administrator by phone at (888) 312 0818 or by e-mail to Info@ITGSecuritiesSettlement.com. You also can obtain a copy of the Stipulation by accessing the Court docket in this case through the Court’s Public Access to Court Electronic Records (PACER) system at www.pacer.gov or https://ecf.nysd.uscourts.gov, or by visiting the Clerk of Court’s Office at the United States District Court for the Southern District of New York, Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York, NY 10007, during regular business hours.

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