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NY Attorney General Schneiderman Upset By Dark Pools from Across the Pond

NYPD Chief Bratton And NY State Attorney Gen. Schneiderman Speak On The Community Overdose Prevention Program

New York Attorney General Eric Schneiderman is accusing British bank Barclays of using so-called “dark pools” where certain investors are given advantages and access to more aggressive trading methods than are allowed to regular clients. In an updated complaint, Schneiderman says the bank has not allowed top electronic trading executives, William White and David Johnsen, answer questions even though they were supoened in the fraud suit, as reported by Reuters. Barclays denies the claims and says the lawsuit was severely flawed from its inception.

Barclays has tried to quash subpoenas and wants the complaint completely dismissed. The presiding judge, Shirley Kornreich, had questions regarding the strength of the original complaint. Barclays said Schneiderman is on a “fishing expedition, ” however, it intends to cooperate in the.

Schneiderman claimed that Barclays kept two classes of investors with two sets of privileges. High profile investors had access to high frequency trading, more rapid trades. Allegedly, algorithms were programmed to favor these “dark pools” of privileged investors and claimed to regular clients that only 6-9% of trading was aggressive, when the amount was closer to 25-30%. Barclays kept this amount high, according to Schneiderman, although under the table to maximize revenues and bonuses, a practice illegal under Martin Act, an anti-fraud law.

 

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