(Bloomberg) — Barclays Plc is being sued by New Yorks attorney general over allegations that the banks dark pool gave high-frequency traders advantages over other customers, despite saying otherwise, a person familiar with the matter said.
Barclays falsified marketing materials to hide how much high-frequency traders were buying and selling, according to the person familiar with the matter, who asked to not be identified because the information hasnt been made public. Barclays runs one of Wall Streets largest dark pools, a private trading venue where investors can trade stocks mostly anonymously. Mark Lane, a spokesman for London-based Barclays, declined to comment.
Eric Schneiderman, the attorney general, earlier this year took a leading role in seeking to reform how equities trade in the $23 trillion U.S. stock market, saying he was examining whether exchanges and dark pools are giving unfair perks to high-frequency trading firms.
The Securities and Exchange Commission yesterday said it would test a program, called a trade-at rule, that would limit the amount of trading that takes place off public exchanges such as the New York Stock Exchange and Nasdaq Stock Market. Trading on dark pools and other off-exchange venues makes up roughly 40 percent of U.S. equity volume.
