A Tower Research Capital LLC unit agreed to pay a record $16 million penalty to settle U.S. regulatory claims that it didn’t hold enough capital to support its high-frequency trading.

Latour Trading LLC failed to maintain minimum levels of net capital on 19 of 24 reporting dates over a two-year period starting in 2010, the Securities and Exchange Commission said in a statement today. Its capital shortfall ranged from $2 million to as much as $28 million, the SEC said.

“This record sanction reflects the seriousness of Latour’s violations of the net capital rule, which is a critical broker-dealer financial responsibility requirement,” Andrew Ceresney, the SEC’s director of enforcement, said. The $16 million penalty is 40 times the previous high that a firm has paid for violating the capital provision, the SEC said.

Tower Research, founded in 1998 by electrical engineer and former Credit Suisse Group AG bond trader Mark Gorton, has grown to be one of the biggest firms using computers to buy and sell securities at speeds faster than the blink of an eye. Latour accounted for as much as 9 percent of the volume for the entire U.S. stock market during the period of the violations, according to the SEC.

Nicolas Niquet, Latour’s former chief operating officer, agreed to pay $150,000 to resolve claims that he was responsible for the company’s insufficient capital cushion. New York-based Latour and Niquet didn’t admit or deny wrongdoing in settling the SEC’s allegations.

‘Remediated Problems’

“Latour has fully remediated the problems described in the commission order and we are pleased to put them behind us,” the company said in an e-mailed statement. “We take our regulatory obligations seriously, strive to continuously enhance our compliance infrastructure, and are committed to complying with all rules and regulations applicable to our businesses.”

Harry Weiss, an attorney representing Latour and Niquet, declined to comment on the settlement.

Tower Research, which is based in New York, received a subpoena earlier this year from Eric Schneiderman, the state’s attorney general, as part of an investigation into whether high- frequency trading firms have unfair advantages over other investors, according to a person with knowledge of the matter who asked not to be identified because his examination is private.