New York says Barclays not cooperating in 'dark pool' probe

Wed Jan 21, 2015 8:11pm EST
 
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By Jonathan Stempel

NEW YORK (Reuters) - New York's top law enforcer on Wednesday accused Barclays Plc of defying his subpoenas in a probe of high-speed trading in its private "dark pool," and moved to expand his lawsuit accusing the British bank of fraud.

Barclays quickly fought back, accusing state Attorney General Eric Schneiderman of overreaching, and scrambling to fix a lawsuit that it said was fatally flawed to begin with.

In a proposed amended complaint, Schneiderman said Barclays has refused to let its top equities electronic trading executives, electronic trading chief William White and head of product development David Johnsen, answer his questions even though both have been subpoenaed.

Schneiderman also said both men were "directly involved in, and oversaw" much of a fraud in which Barclays gave high-frequency traders an unfair advantage, and harmed other clients and investors by promising to forbid the kind of "predatory" and "toxic" trading it was allowing in its dark pool.

A Feb. 11 hearing is scheduled in the New York State Supreme Court in Manhattan over whether Schneiderman may proceed with his amended complaint.

The presiding judge, Shirley Kornreich, last month questioned the strength of the original complaint, which was filed June 25 and which Barclays wants dismissed.

Barclays on Wednesday night moved to quash the subpoenas.

It claimed in a court filing that Schneiderman was using them in a "fishing expedition" to fix defects in a lawsuit that the proposed amended complaint "in no way cured."   Continued...

 
Logos are seen outside a branch of Barclays bank in London July 30, 2013. REUTERS/Toby Melville