BATS Global Markets, the second-largest stock exchange in the US by volume, is in advanced settlement talks to resolve a Securities and Exchange Commission inquiry into whether it treated certain high-frequency traders preferentially, according to people familiar with the matter.

The civil inquiry is focused on actions by Direct Edge, the stock exchange operator that BATS acquired this year, the people say. It is not clear how much BATS will pay to resolve the matter.

To date, the largest fine imposed on an exchange was $10m paid by Nasdaq last year for not having adequate systems in place for Facebook’s initial public offering. Last month, Citigroup paid half that amount for failing to protect confidential trading data on LavaFlow, an alternative trading system that it operates.

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The BATS talks follow the SEC’s broad review of equity markets, which has resulted in investigations into whether exchanges and traders are following the rules, and not giving advantages to certain clients. One line of inquiry has concerned the proliferation of order types that exchanges offer to their clients, including high-frequency traders.

The SEC is investigating several exchanges, alternative trading systems, and anonymous dark pool trading venues, including one operated by Barclays. Other cases or settlements could follow this year, a person familiar with the matter said.

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The BATS settlement talks were first reported by the Wall Street Journal, and came to light just two weeks after the exchange group’s chief executive, Bill O’Brien, abruptly left the company. He had joined BATS as part of its merger with Direct Edge, where he was chief executive. Mr O’Brien is not expected to face any personal liability from the investigation, a person close to the matter said.

BATS and the SEC declined to comment.

At the time, BATS did not give any reason for Mr O’Brien’s departure. It followed a period of intense scrutiny of the industry from regulators, law enforcement officials and lawmakers following the publication of Michael Lewis’s book Flash Boys, which alleged the markets were rigged.

After the publication of the book, Mr O’Brien was involved in a heated and widely watched exchange on CNBC with Mr Lewis and Brad Katsuyama. chief executive of the IEX equity trading venue, which is featured in Flash Boys as a crusader against high-frequency traders.

BATS later corrected comments by Mr O’Brien regarding the way certain BATS exchanges price trades.