Barclays files to dismiss New York lawsuit against 'dark pool'

Thu Jul 24, 2014 1:27pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Herbert Lash and Steve Slater

NEW YORK/LONDON (Reuters) - Barclays Plc (BARC.L: Quote) urged the dismissal on Thursday of a lawsuit from the New York attorney general alleging the bank lied to clients about its high-speed trading venue, saying the complaint had "fatal flaws" because Barclays' customers were never misled.

The bank's motion to dismiss the lawsuit against its private trading venue – or "dark pool" – said the attorney general failed to identify any fraud, and did not establish material misstatements, identify victims or actual harm.

Barclays said the lawsuit filed by Attorney General Eric Schneiderman had clear and substantial errors. Should litigation proceed, the bank said it would show how baseless the allegations are.

"The very marketing documents and e-mails from which the complaint selectively quotes, along with the complaint's other fatal flaws, are sufficient to require dismissal of this 'fraud'

action," the motion said.

In a statement from a spokesman, Schneiderman stood his ground, saying the lawsuit detailed how Barclays engaged in "a persistent pattern of fraud and deceit, lying to its investors in order to grow its dark pool."

Barclays said Schneiderman lacked the authority to accuse the bank of wrongdoing under New York's Martin Act, which aims to protect investors when the purchase, sale or exchange of a security is misrepresented.

Barclays' clients are highly sophisticated traders and money managers who are capable of closely monitoring the quality of their trades based on execution data, not glossy marketing brochures or quotes from magazine articles, the bank said.   Continued...

 
A "no parking" road sign is seen in front of a Barclays branch in downtown Rome May 8, 2014.  REUTERS/Max Rossi