Investor files US lawsuit over Barclays "dark pool"

by Reuters 0

A US investor is suing Barclays Plc current and former bosses.

The lawsuit was for losses suffered after New York’s attorney general accused the British bank of lying to customers regarding its electronic trading platform.

Barbara Strougo of New York filed a class action lawsuit in New York on Monday against Barclays and its Chief Executive Antony Jenkins and Finance Director Tushar Morzaria. It also names former CEO Bob Diamond and former finance chief Chris Lucas as defendants.

Strougo claimed she and other buyers of Barclays American depositary shares (ADS) lost money after the attorney general brought a lawsuit against Barclays’ “dark pool” trading venue on June 25. Barclays’ London-listed shares fell more than 5 per cent the next day, and the ADS fell 7.4 per cent.

Dark pools let institutional investors trade large blocks of shares anonymously and only make trading data available afterwards so that investors with large orders are not at a disadvantage.

The lawsuit claims Barclays made false and/or misleading statements and failed to disclose material adverse facts regarding its operations in its dark pool.

(READ MORE: Barclays investigated for dark pool trading)

The claims in the suit were similar to those alleged by New York Attorney General Eric Scheiderman on June 25, who said the bank lied to its institutional clients and gave high speed traders an unfair advantage over investors in order to increase its trading activity and revenues.

The claimants said that due to the “defendants’ wrongful acts and omissions” and fall in its shares, they “have suffered significant losses and damages”.

Barclays declined to comment on the lawsuit.

Last week the bank filed a motion to dismiss the attorney general’s claims, saying they had “fatal flaws” because Barclays’ customers were never misled and marketing material information had been taken out of context.

The bank is a global financial services company with regional and African presence through the [DATA BGA:Barclays Africa Group].