Barclays share price: Bank agrees ‘dark pools’ settlement with US regulators

Barclays (LON:BARC) will pay $70 million (£49 million) to settle a case brought by US authorities over allegations the bank misled users of its “dark pool” trading system.

The US Securities and Exchange Commission (SEC) and the New York Attorney General’s Office said yesterday that the London-based bank had admitted wrongdoing and agreed to pay each agency $35 million (£24.5 million). The penalty, along with one of $84.3 million (£58.9 million) levied on Credit Suisse for similar breaches of US federal securities laws, was one of the highest imposed in a case of its kind.

The dispute centred on whether the banks disclosed enough to their clients about trading in their dark pools — private trading venues designed to allow investors to trade large numbers of shares without moving the price against them as a result of the transaction being public knowledge. Barclays misrepresented to clients how it monitored its Barclays LX platform for high-frequency trading, while Credit Suisse systematically routed orders to its own dark pool, but told clients that it did not prioritise one trading venue over another, according to New York Attorney General Eric Schneiderman.
“These cases mark the first major victory in the fight against fraud in dark-pool trading that began when we first sued Barclays: coordinated and aggressive government action, admissions of wrongdoing, and meaningful reforms to protect investors from predatory, high-frequency traders,” Schneiderman, said in a statement yesterday. “We will continue to take the fight to those who aim to rig the system and those who look the other way,” he added.
Despite the imposed penalty, Barclays’ share price opened higher this morning. By 08:16 GMT, the stock had gained 1.10 percent to trade at 188.05p, outperforming the FTSE 100, which meanwhile stood just 0.04 percent better off at 6,086.09 points.
As of 08:46 GMT, Monday, 01 February, Barclays share price is 188.05p.