Less than two months after N.Y. Attorney General Eric Schneiderman levied charges against Barclays that it deliberately misled investors in its dark pool, regulators are reportedly looking into operations at five more investment banks. No specific allegations have been revealed, but several firms have confirmed that either Schneiderman's office or another agency is investigating their practices.
BATS Global Markets is reportedly nearing a settlement with the Securities and Exchange Commission over allegations that its Direct Edge Holdings unit granted high-frequency traders unfair advantages. The SEC has been broadly investigating exchanges and trading venues since 2011 to determine whether some market participants have a technological edge over others.
Liquidnet won regulatory approval for its acquisition of Vega-Chi last week, and the deal is set to close Friday, the Wall Street Journal reported, enabling the company to move ahead with plans to strengthen Vega-Chi's role in the bond market.
Wall Street's main trade group set forth a proposal for reforming U.S. equity markets this week, focusing mainly on eliminating time advantages in data dissemination, reigning in the number of trading venues and eliminating or greatly reducing exchange fees that the group says are distorting pricing and executions.
Several unintended consequences can be expected to emerge from the wider tick sized pilot proposed by the Securities and Exchange Commission, including more dark trading and less liquidity, according to market structure analysis by KCG Holdings, Inc.
The reports of an exodus of banks and asset managers from the Barclays LX dark pool following the charges filed against it by New York authorities were confirmed by just-released industry data. The number of shares traded on the venue fell by 37 percent in the week the charges were announced, according to data from the Financial Industry Regulatory Authority.
Growing numbers of banks and asset managers are reportedly withdrawing from Barclays LX dark pool following last week's lawsuit by New York Attorney General Eric Schneiderman. The suit alleges that Barclays deliberately misled investors about the participation of "predatory" high-frequency traders in the venue.
Barclays LX has climbed to become one of the top dark pools by total trades, but the firm was so intent on getting to that spot that it deliberately defrauded and misled clients, New York Attorney General Eric Schneiderman alleges in a lawsuit against the firm announced Wednesday.
Broker payments such as payment-for-order flow and maker-taker pricing took top billing in a Senate subcommittee hearing this week with senators expressing concerns that the payments present conflicts of interest.
The Senate Permanent Subcommittee on Investigations is holding a hearing today on the topic of "Conflicts of Interest, Investor Loss of Confidence, and High Speed Trading in U.S. Stock Markets." The six panelists scheduled to testify will probably put forth a variety of opinions. On blogs, media sites and newspaper columns, others are already weighing in.