Barclays: 'That darkpool lawsuit is unjustified'

The bank has hit back at an attempt by the New York Attorney General to sue it over alleged misconduct around its anonymous trading platform.

by Emma Haslett
Last Updated: 24 Jul 2014

Another turn in the increasingly twisty drama that is the Barclays darkpool: having sat back and taken abuse from the New York Attorney General, followed by various regulators and just about everyone and their mum on Twitter, Barclays has decided to fight back, attempting to have a lawsuit over alleged misconduct around the darkpool thrown out of court.

This started in June, when attorney general Eric Schneiderman said the bank had engaged in a 'flagrant pattern of fraud, deception and dishonesty with Barclays clients and the investing public'. He accused the bank of misleading investors about the number of 'predatory' high-speed traders in the darkpool.

In marketing material, it said there weren't any - in reality, they made up 75% of those trading on the platform. An email from an employee was pretty condemning: 'I had always liked the idea that we were being transparent, but happy to take liberties if we can all agree'.

But today the bank lodged a 49-page filing with New York's Supreme Court, saying the lawsuit was 'relying primarily on snippets of marketing brochures and brief quotes in news articles', and that 'the complaint fails to identify any fraud - establishing no material misstatements, no identified victims, and no actual harm'. It also issued a statement saying the lawsuit  is 'not justified':

'Barclays works closely with its regulators in all jurisdictions and will continue to cooperate with the New York Attorney General. However, we do not believe that this suit is justified, and we have a duty to our shareholders, clients and staff to defend our position.'

We'd imagine shareholders are the ones it's mainly worrying about - the volume of trading in its darkpool has plummeted since Schneiderman made his accusations, meaning it dropped in the rankings from the second-most popular place to do anonymous trading to the 12th:

For Barclays' already-suffering investment banking decision, that could be disastrous. After all the flack the bank has come in for, you can understand why chief executive Antony Jenkins is keen to establish its innocence.

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