Liquidnet--'Napster for stocks'

Liquidnet has pioneered an electronic marketplace that allows institutional investors to trade large blocks of stock anonymously.
The New York Times

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Did someone forget about OptiMark?

Liquidnet hasn't pioneered anything. A company called OptiMark had blown through a billion dollars in venture capital before anyone had ever heard of Liquidnet, and they were the true pioneers. They had several major borkerages as partners, and Bill Lupien, the former CEO of Instinet at the helm. I hate when reporters don't leave their email address so you can point out the inaccuracies of their stories to them.

[Razzl]

How can this be legal? Where's the SEC?

Okay, given that the stock exchanges have to operate under numerous specific rules designed to maintain liquidity and transparency for all the players in the market, how can anyone be operating an unregulated off-market exchange that allows institutions to hide big trades? When institutions move large numbers of shares around and take the wind out a stock's market movement, stranding lots of retail customers in a stock that stopped moving, shouldn't someone go to jail for arranging that like poor Martha did? Where's the SEC in all this?