Barclays Plc sought help of court in throwing out a case filed by New York Attorney General Eric Schneiderman accusing the lender of deceiving customers and concealing the role high-speed traders played to boost its dark pool position.
The London-based lender said the accusations fail to demonstrate how any investors were hurt and is based on obvious and significant factual errors, the filing in Manhattan state court showed today. The bank claimed that the attorney general’s reliance on the Martin Act of New York’s securities law in bring the lawsuit was quite a stretch, Bloomberg reported.
The provision, which is a solid statute against fraud that the New York attorney general’s office can use, is confined to fraudulent conduct in the buying or sale of securities and does not cover all actions pertaining to finance, Barclays argued. The claims in the lawsuit relate to an alternative trading system called Barclays LX and do not pinpoint any misrepresentations regarding any security, the filing showed.
The Barclay’s court filing added that applying the Martin Act in alternative trading platforms is likely to introduce contradictions with the US Securities Act of 1934, which bestows upon the Securities and Exchange Commission regulatory power over platforms such as LX.
The suit does not put into account the fact that traders who utilize the Barclays LX are “highly sophisticated traders and asset managers”, entrusted with the responsibility to invest millions and billions worth of assets, the lender said.
“The very marketing documents and e-mails from which the complaint selectively quotes, along with the complaint’s other fatal flaws, are sufficient to require dismissal of this ‘fraud’action,” the filing is quoted by Reuters as stating.
But a statement from spokesman, the attorney general stuck to his guns, saying the case carried details of how the bank continued to engage in fraudulent activity and deceit, telling its customers lies to expand its dark pool.
To contact the reporter of the story: Yashu Gola at firstname.lastname@example.org
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