In a statement on Sunday, the New York Attorney General and the Securities and Exchange Commission said that two major global banks have reached a $154.3 million settlement in their “dark pool” fraud case.
Investigations found that the banks, Barclays and Credit Suisse, falsely led customers to believe that they could safely trade on these dark pool financial exchanges, leaving them vulnerable to high-speed traders who had an unfair advantage.
From ABC News:
“These cases mark the first major victory in the fight to combat fraud in dark pool trading,” said New York Attorney General Eric Schneiderman in the statement. “We will continue to take the fight to those who aim to rig the system and those who look the other way.”
Zurich-based Credit Suisse, a major firm on Wall Street, said it was “pleased to have resolved these matters.”
London-based Barclays, which has extensive operations in the United States, said “the agreement will enable us to focus all of our efforts on serving our clients.”
The SEC and New York Attorney General had planned to announce the joint settlement Monday before it was reported by The Wall Street Journal Sunday morning.
Dark pools are private exchanges for trading stocks and bonds. Unlike traditional markets with public prices, trades on dark pools are generally confidential, a benefit for companies engaging in large transactions.
ABC News reports that Barclays will pay a total of $70 million in the settlement, which will be split evenly between the SEC and New York State. Meanwhile, Credit Suisse will pay $60 million to New York State and the SEC, and the SEC will also collect an additional $24.3 million for other violations.
Photo by khrawlings via Flickr CC License
