Barclays will pay $70m to settle a case brought by US authorities over allegations the bank “misled” users of its “dark pool” trading system.
The US Securities and Exchange Commission (SEC) and the New York Attorney General’s Office said the London-based company had admitted wrongdoing and agreed to pay each agency $35m.
The penalty, along with one of $84.3m levied on Credit Suisse for similar breaches of US federal securities laws, was one of the highest imposed in a case of its type.
The lawsuit said Barclays deceived investors about its dark pool, an electronic operation where trades take place out of public view.
Barclays, which lost £3 billion of its stock market value in one session after the claims were disclosed in June 2014, initially said it intended to defend its position.
A spokesman for the bank, which has extensive operations in the United States, said “the agreement will enable us to focus all of our efforts on serving our clients”.
According to the SEC, the company did not police its dark pool platform for “predatory trading” and also “misrepresented” the type of market data fed into it, including using a mix of direct and slower feeds.
Robert Cohen, co-chief of the Market Abuse Unit, said: “Barclays misrepresented its efforts to police its dark pool, overrode its surveillance tool, and misled its subscribers about data feeds at the very time that data feeds were an intense topic of interest.
“Investors deserve fair and equitable markets without this misbehaviour.”
Andrew Ceresney, director of the SEC’s Enforcement Division added: “Dark pools have a significant role in today’s equity marketplace, and the firms that run these venues must ensure that they do not make misstatements to subscribers about their material operations.
“These largest-ever penalties imposed in SEC cases involving two of the largest ATSs (alternative trading systems) show that firms pay a steep price when they mislead subscribers.”
Credit Suisse settled its case without admitting or denying the findings.