Money managers and brokers shunned Barclays Plc (BARC)’s
dark pool, and Chief Executive Officer Antony Jenkins pledged an
urgent inquiry, after the bank was accused of lying to clients about
high-frequency trading on the venue.
Deutsche Bank AG, Royal Bank of Canada (RY), Sanford C.
Bernstein & Co. and Investment Technology Group Inc. are among brokerages
that disconnected from the Barclays LX platform after New York Attorney General
Eric Schneiderman sued the bank yesterday, according to people with knowledge
of the matter. Barclays falsely assured investors they would be protected from
high-frequency traders while it simultaneously aided predatory tactics,
Schneiderman’s office wrote in the complaint.
“These are serious charges that allege a grave failure to
live up to our values and to the culture at Barclays which we are trying to
create,” Jenkins, 52, wrote in a memo to employees today. “If there has been
wrongdoing we will address it quickly and decisively.”
Jenkins, who took over as CEO in 2012 after the firm was
fined for rigging benchmark interest rates, is trying to overhaul a culture
that veered into arrogance, greed and ethical ambiguity, according to a
company-commissioned study. In today’s memo, he said Barclays enlisted external
resources for an objective review and that he will get findings directly.
The bank’s stock fell 6.5 percent today in London trading to
215 pence, the biggest drop since June 2012. LX handles about 282 million
shares weekly, making it the second-largest U.S. dark pool behind only Credit
Suisse Group AG’s Crossfinder, according to data from the Financial Industry
Regulatory Authority. Each day, more than 6 billion shares change hands in the
U.S. stock market, according to data compiled by Bloomberg.
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