Barclays to pay $70m fine over ‘dark pool’ trading operation

1st February 2016


Barclays is to be hit with a $70m fine for misleading investors in regards to it US “dark pool” trading arm, the New York Attorney General’s office has said.

According to BBC News the bank did not make it clear to its customers that predatory high-frequency traders were using the platform.

Dark pools are essentially private systems where dealing can be conducted without traders having to reveal their identity.

Barclays had previously attempted to have the case against it thrown out of court.

The New York Attorney General (NYAG) and the US regulator, the Securities and Exchange Commission (SEC) are expected to make a formal announcement, which will also include a settlement with Credit Suisse over dark pool trading, on Monday.

The BBC report noted that on top of the fine, it is anticipated that Barclays will admit to having broken the law and will agree to put in place an independent monitor to conduct a review of its electronic trading business.

It is expected that Credit Suisse will pay a penalty of some $84.3m but will neither admit, or deny, any wrongdoing.

In a statement, NYAG Eric Schneiderman said: “These cases mark the first major victory in the fight against fraud in dark pool trading that began when we first sued Barclayws.

“We will continue to take the fight to those who aim to rig the system and those who look the other way.”

SEC chair Mary Jo White highlighted that the cases “are the most recent in a series of strong SEC enforcement actions involving dark pools and other alternative trading systems”, adding that the SEC “will continue to shed light on dark pools to better protect investors”.

By 08:53am on Monday, shares in Barclays were trading 1% , or 2.45p higher, at 188.45p.

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