Barclays accused of ‘dark pool’ fraud
And this time the Attorney General of New York State has weighed in on the bank. Eric Schneiderman and the state of NY have filed a lawsuit against them for giving an unfair advantage to high frequency, 'predatory' trading clients in the US – despite telling everyone else that they were trying to protect other customers against such traders.
‘Dark pool’ trading allows investors to trade without influencing the market.
Barclay’s dark pool system was called LX Liquidity Cross, and was supposedly set up to get customers the best possible prices for their shares. Instead, they – whaddya know? – maximised their own profits. Nearly all trading was done through LX, rather than through other exchanges that would have offered a better price.
'Barclays grew its dark pool by telling investors they were diving into safe waters,’ Schneiderman said. ‘Barclays' dark pool was full of predators - there at Barclays' invitation.’
*cue theme from Jaws*