Barclays Dark Pool Trading Volume Rises, Highest Since Suit

Aug 18, 2014 12:37 pm ET

(Updates shares at close in fifth paragraph.)

Aug. 18 (Bloomberg) -- Barclays Plc saw the volume of U.S. shares traded at its dark pool rise to the highest since it was sued by New York for allegedly lying to customers of the venue.

About 106 million U.S. shares were traded in the private trading platform in the week of July 28, up 21 percent from about 87.6 million in the previous week, according to data from the Financial Industry Regulatory Authority. That’s the most since 312 million shares were traded in the week of June 23.

Britain’s second-largest bank is fighting allegations by New York Attorney General Eric Schneiderman that it falsified marketing materials to hide the presence of high-frequency traders at what used to be Wall Street’s second-largest dark pool. The bank has challenged Schneiderman’s June 25 complaint, saying it’s based on “clear and substantial factual errors.”

“We do not believe this suit is justified, and we have a duty to our shareholders, clients and staff to defend our position,” Barclays said in a July 24 statement.

The stock rose 0.9 percent to 219.6 pence in London. The shares have dropped 19 percent this year, making Barclays the worst performer among Britain’s five largest banks.

The London-based bank has slipped from being the second- largest dark-pool operator in the U.S. behind Credit Suisse Group AG to No. 13, according to Finra data. Credit Suisse’s Crossfinder venue saw the total volume of U.S. shares traded gain 19 percent to 455.6 million in the week of July 28.

Barclays, led by Chief Executive Officer Antony Jenkins, is facing various legal battles around the world over allegations of past misconduct, with a litigation bill that could rise to as much as 7 billion pounds ($12 billion) over the next four years, analysts at Nomura International Plc led by Chintan Joshi wrote last month. Nomura has a buy recommendation on the shares.

The case is New York v. Barclays Capital, 451391-2014, Supreme Court of the State of New York, County of New York.