Barclays share price: Banks start to drain lender’s dark pool

on Jun 27, 2014
Updated: Apr 9, 2020
Listen, Friday, June 27: Banks have started withdrawing their business from Barclays’ (LON:BARC) private equity trading platform, known as a ‘dark pool’, after the British bank was sued by New York’s top securities regulator for a “a flagrant pattern of fraud, deception and dishonesty,” the Financial Times has reported.

Yesterday, the New York Attorney General, Eric Schneiderman, filed a securities fraud lawsuit against Barclays, contending that contrary to its own assurances, the bank had operated its Barclays LX anonymous trading venue to favor high-frequency traders ( Barclays share price plunges as bank faces US lawsuit ).

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According to an article in the FT yesterday, Deutsche Bank, Credit Suisse and Royal Bank of Canada, as well as asset manager Alliance Bernstein were among the institutions that have pulled out of Barclays’ dark pool following the scandal. Goldman Sachs, Morgan Stanley and JPMorgan Chase & Co, have also stopped using LX, the newspaper added, citing people familiar with the companies.

Barclays said any drop in trading volumes at the platform might be due to a technical glitch.
**CEO Jenkins under fire**
Barclays CEO Antony Jenkins has used the US lawsuit to reinforce the need for change at the bank, reminding staff of “the urgent necessity” of reform and warning that he would “not tolerate any circumstances in which our clients are lied to or misled”.

In an email to staff last night, Jenkins expressed his “deep disappointment and frustration” about the fraud allegations, and promised that any individuals found to have lied to clients would be “dealt with severely”. He added Barclays was “working to understand the situation”, and that it had brought in an external resource to investigate the matter, on top of an internal investigation.

A top 30 investor in Barclays said it could be very ‘challenging’ for the CEO, who took over in 2012 pledging to reform the bank’s culture. “He has talked about how many people will not want to stay at Barclays under his new approach and some people will be asked to leave. Now it will be interesting to see what he does about this – there needs to be swift action,” the shareholder was quoted by the FT as saying.
**Barclays share price hits 19-month low**
The news of the US lawsuit triggered a major sell-off in Barclays’ stock yesterday. The shares slumped to their lowest level in 19 months amid fears about the potential repercussions the lender could face from the charges.
Barclays’ shares closed at 215.00p. The 6.5 percent fall wiped almost £2.5 billion off the British bank’s value. Today, the stock opened almost one percent lower, but gained some ground a little later. By 08:36 BST, the share price had risen 1.62 percent to 218.45p.
Of the 28 analysts projecting 12 month price targets for the FTSE 100-listed lender for the Financial Times, the median target is 290.50p, with a high estimate of 365.00p and a low estimate of 203.22p.
**As of 08:03 BST, buy Barclays shares at 214.25p.**
**As of 08:03 BST, sell Barclays shares at 214.15p.**


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