Barclays Plc (BARC) saw the number of U.S. shares traded in its dark pool decline for a second week after it was sued by New York for allegedly lying to customers.
About 66 million U.S. shares were traded in the dark pool in the week of June 30, down 66 percent from about 197 million in the previous week, according to data from the Financial Industry Regulation Authority. The drop follows a 37 percent decline from 312 million in the previous week, data show.
Barclays lied to customers and masked the role of high-frequency traders as it sought to boost revenue at one of Wall Street’s largest private trading venues, New York Attorney General Eric Schneiderman said in a complaint filed June 25. Barclays Chief Executive Officer Antony Jenkins, in a memo to staff, said the lawsuit represents “serious charges that allege a grave failure to live up to our values.”
The stock declined 1 percent to 209.15 pence at 12.40 p.m. in London. The shares have dropped 23 percent this year. That’s the worst performance among Britain’s five largest banks.
Barclays dropped from second place behind Credit Suisse Group AG (CSGN) as the largest dark pool operator in the U.S. to 12th, the Finra data show. Credit Suisse, which remains No. 1, saw a 19 percent drop in the number of shares traded in that week.
Negative View
Barclays has said it’s cooperating with Schneidermann’s office and is examining the matter internally. The bank temporarily removed Bill White from his role overseeing electronic equities trading last month to focus on the bank’s response to the lawsuit, according to a person briefed on the matter. White isn’t being suspended, the person said.
Dark Pools and high-frequency traders are finding little support among financial professionals amid criticism from books and Congress, responses to a Bloomberg Global Poll show. At least half the respondents to the poll published today professed a negative view of the anonymous equity markets and proprietary firms that buy and sell stocks in millionths of a second.
Barclays has until July 25 to reply to the attorney general’s civil complaint.
To contact the reporter on this story: Richard Partington in London at rpartington@bloomberg.net
To contact the editors responsible for this story: Simone Meier at smeier@bloomberg.net Edward Evans