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February 01, 2016 at 08:42 AM
Barclays Capital Inc. and Credit Suisse Securities agreed Monday to pay a combined $154.3 million to the state of New York and the Securities and Exchange Commission to settle investigations into false statements and omissions relating to the marketing of their dark pools and other high-speed electronic equities trading services.
Under the settlement, Barclays will pay a penalty of $70 million, split equally between New York and the SEC, and will install an independent monitor to ensure proper operation of its electronic trading division.
Credit Suisse will pay a penalty of $60 million split equally between New York and the SEC and will pay a further $24.3 million in disgorgement and prejudgment interest to the SEC relating to other violations.
The New York attorney general and the SEC have both censured Barclays and Credit Suisse for their misconduct.
“These cases mark the first major victory in the fight to combat fraud in dark pool trading and bring meaningful reforms to protect investors from predatory, high-frequency traders,” said Attorney General Eric Schneiderman, in a statement. “This effort, which began when we first sued Barclays, includes coordinated and aggressive government action which forced admissions of wrongdoing and record fines. We will continue to take the fight to those who aim to rig the system and those who look the other way.”
SEC Chairwoman Mary Jo White added in her own statement that “these cases are the most recent in a series of strong SEC enforcement actions involving dark pools and other alternative trading systems,” adding that the agency “will continue to shed light on dark pools to better protect investors.”
White announced last June that the agency would require proprietary traders who use computers to buy and sell stocks in milliseconds to register with the SEC.
