Barclays challenges US ‘dark pool’ fraud case
Barclays has said it wants legal action alleging fraud in its US “dark pool” trading operations to be thrown out of court.
In a statement the bank said: “We do not believe that this suit is justified.”
The British Broadcasting Corporation reports that New York prosecutors alleged in June that Barclays had misled investors using its alternative trading platform.
“Dark pool” trading operations allow investors to trade large blocks of shares but keep the price private.
The lawsuit alleged Barclays told clients its pool was free of aggressive traders.
However, Barclays had invited “predators” into the pool, the US prosecutor alleged in June.
In addition, Barclays was accused of favouring its own pool, while telling traders it would route trades to the most favourable exchange for them.
Barclays hit back on Thursday, saying that the case should be dismissed.
“Barclays works closely with its regulators in all jurisdictions and will continue to cooperate with the New York Attorney General,” a Barclays spokesman said.
“However, we do not believe that this suit is justified, and we have a duty to our shareholders, clients and staff to defend our position,” he added.
Barclays said the New York Attorney General’s case “fails to identify any fraud”.
The bank argued that there was no evidence traders had lost money. It said that investment professionals in the pool would not have relied on a brochure when deciding whether to trade.
It added that prosecutors were acting outside their jurisdiction, and encroaching on the legal territory of the Securities and Exchange Commission.
The New York Attorney General’s office responded on Thursday, saying that “Barclays engaged in a persistent pattern of fraud and deceit, lying to its investors in order to grow its own dark pool.”
“The Attorney General is committed to ensuring there is one set of rules for everyone in the markets, and will crack down on abuses wherever he sees them,” a spokesman for the prosecutor said.
He added that the Attorney General was confident that Barclay’s request to have the case thrown out would be rejected.
In a statement the bank said: “We do not believe that this suit is justified.”
The British Broadcasting Corporation reports that New York prosecutors alleged in June that Barclays had misled investors using its alternative trading platform.
“Dark pool” trading operations allow investors to trade large blocks of shares but keep the price private.
The lawsuit alleged Barclays told clients its pool was free of aggressive traders.
However, Barclays had invited “predators” into the pool, the US prosecutor alleged in June.
In addition, Barclays was accused of favouring its own pool, while telling traders it would route trades to the most favourable exchange for them.
Barclays hit back on Thursday, saying that the case should be dismissed.
“Barclays works closely with its regulators in all jurisdictions and will continue to cooperate with the New York Attorney General,” a Barclays spokesman said.
“However, we do not believe that this suit is justified, and we have a duty to our shareholders, clients and staff to defend our position,” he added.
Barclays said the New York Attorney General’s case “fails to identify any fraud”.
The bank argued that there was no evidence traders had lost money. It said that investment professionals in the pool would not have relied on a brochure when deciding whether to trade.
It added that prosecutors were acting outside their jurisdiction, and encroaching on the legal territory of the Securities and Exchange Commission.
The New York Attorney General’s office responded on Thursday, saying that “Barclays engaged in a persistent pattern of fraud and deceit, lying to its investors in order to grow its own dark pool.”
“The Attorney General is committed to ensuring there is one set of rules for everyone in the markets, and will crack down on abuses wherever he sees them,” a spokesman for the prosecutor said.
He added that the Attorney General was confident that Barclay’s request to have the case thrown out would be rejected.
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