Fraud charges against Barclays in the US over the bank's "dark pool" trading operations have been announced by New York state prosecutors. Dark pools allow banks' clients to trade large blocks of shares while keeping prices more private. Prosecutors said Barclays gave clients "false statements" and misrepresented the kinds of investors that were using the dark pool.
New York Attorney General Schneiderman said:
"The facts alleged in our complaint show that Barclays demonstrated a disturbing disregard for its investors in a systematic pattern of fraud and deceit. Barclays grew its dark pool by telling investors they were diving into safe waters. According to the lawsuit, Barclays' dark pool was full of predators - there at Barclays' invitation".
The lawsuit accused Barclays of telling investors trading was being closely monitored and "predatory" traders would be held accountable. But in fact Barclays did not prohibit a single trader from operating in its dark pool, the lawsuit said. The lawsuit alleges that Barclays operated its dark pool to favour high-frequency traders and "actively sought to attract them".
Barclays has been the subject of several investigations, fines and settlements in recent years.
In May it was fined £26m by UK regulators after one of its traders was discovered attempting to fix the price of gold.
In April, Barclays agreed to a $280m (£167m) settlement with the US Federal Housing and Finance Authority (FHFA). The agreement settles claims by the FHFA that Barclays misled US mortgage lenders Fannie Mae and Freddie Mac during the housing crisis.
In 2012 it was fined £290m by UK regulators for attempting to manipulate an important lending rate, known as Libor.
New York Attorney General Schneiderman said:
"The facts alleged in our complaint show that Barclays demonstrated a disturbing disregard for its investors in a systematic pattern of fraud and deceit. Barclays grew its dark pool by telling investors they were diving into safe waters. According to the lawsuit, Barclays' dark pool was full of predators - there at Barclays' invitation".
The lawsuit accused Barclays of telling investors trading was being closely monitored and "predatory" traders would be held accountable. But in fact Barclays did not prohibit a single trader from operating in its dark pool, the lawsuit said. The lawsuit alleges that Barclays operated its dark pool to favour high-frequency traders and "actively sought to attract them".
Barclays has been the subject of several investigations, fines and settlements in recent years.
In May it was fined £26m by UK regulators after one of its traders was discovered attempting to fix the price of gold.
In April, Barclays agreed to a $280m (£167m) settlement with the US Federal Housing and Finance Authority (FHFA). The agreement settles claims by the FHFA that Barclays misled US mortgage lenders Fannie Mae and Freddie Mac during the housing crisis.
In 2012 it was fined £290m by UK regulators for attempting to manipulate an important lending rate, known as Libor.
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