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Brokerages and Traders Sued by the City of Providence
According to a report by Bloomberg News, Bank of America Corp. and the New York Stock Exchange were among dozens of Wall Street banks and other financial companies that have been sued over high-frequency trading by the city of Providence, Rhode Island, over claims they rigged securities markets to divert billions of dollars from buyers and sellers of shares.
The lawsuit claims according to USA Today, that the defendants routinely engaged in “manipulative, self-dealing and deceptive conduct,” including brokerage firms providing details of their clients’ offers on stocks to high-speed trading firms, which would then trade against them. The high-speed trading industry came under greater scrutiny following the publication last month of author Michael Lewis’ book “Flash Boys: A Wall Street Revolt.”
In the complaint that was filed on Friday in the federal court in Manhattan, the city of Providence is seeking unspecified damages on behalf of all public investors that bought or sold stock in the past five years, according to the Brisbane Times.
The lawsuit said that according to Reuters, “By employing the aforementioned devices, contrivances, artifices and manipulations, defendants pursued a fraudulent scheme and wrongful course of business that operated as a fraud or deceit on public investors trading stocks on the U.S. stock exchanges.”
Providence said in its complaint that, “Public investors are entitled to be treated fairly and honestly by brokers and exchanges,” and that “In addition to destroying trust in the U.S. capital markets, the misconduct alleged herein has siphoned off billions of dollars from private and public pension funds and individual retirement accounts that millions of Americans depend on.”
A spokesman for Charlotte, North Carolina-based Bank of America, Lawrence Grayson, declined to comment according to Bloomberg News and representatives for the various defendants either declined to comment or did not respond to requests for comment on the litigation, according to Reuters.
Image Credit: www.usatoday.comBrokerages and Traders Sued by the City of Providence by Jaan