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Barclays Bank Sued by New York Attorney General Eric Schneiderman
Barclays PLC has been sued by New York Attorney General Eric Schneiderman for reportedly lying about how it favors high-frequency players in the stock-trading business it runs, according to the Wall Street Journal.
The lawsuit was filed on Wednesday and it claims that Barclays took part in fraudulent activity that is related to trading venues known as a ‘dark pool.’ This is when orders to buy and sell are reported to the public. The reports permit the investors to hide their interest and hide from firms.
The dark pool, called LX, has been accused of favoring traders who are of high-frequency who move in-and-out of markets quickly. The bank has also downplayed which traders use the system and to what degree they use it. The bank has just 20 days to respond to thre charges.
A spokesman for Barclays, Mark Lane, told The Wall Street Journal, “We take these allegations very seriously. Barclays has been cooperating with the New York attorney general and the SEC and has been examining this matter internally. The integrity of the markets is a top priority of Barclays.”
The lawsuit claims that the bank told clients it protected them from high-speed firms, but it “operated its dark pool to favor high-frequency traders.”
The complaint continued with, “Barclays has actively sought to attract such traders to its dark pool, and it has given them advantages over others.”
Only one high-speed trading client of Barclays is named in the lawsuit; Tradebot Systems Inc. The company declined to comment.Barclays PLC Sued by New York Attorney General by Jim Vassallo