“We are pleased to have resolved these matters with the SEC and the NY attorney general”, Nicole Sharp, a bank spokeswoman, said in a statement.
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The New York Attorney General’s Office said the banks did not disclose to clients that high-frequency traders were using the private operations.
While in August 2015, it was reported that both the banks were in talks with the regulators, Barclays now seems to have settled the claims by agreeing to pay a fine of $70m evenly between the SEC and New York State.
Barclays admitted to misleading investors and violating securities laws, and agreed to have an independent monitor review operations of its electronic-trading division, according to the statement from the NY attorney general.
The settlements mark the two largest fines ever paid in connection with cases involving the privately run stock-trading venues. The bank also failed to warn investors of a separate programme that alerted high-frequency traders to activities taking place in its dark pool.
Spokesmen for Barclays and Credit Suisse did not comment.
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”.
Dark pools are a type of private market which allow investors to trade without revealing their identities. Half of the amount Barclays is paying will go the SEC and half to the NY attorney general. In 2014, an SEC official publicly rebutted criticism that the agency wasn’t doing enough in the era of light-speed trading after the Schneiderman investigation began. The high- profile cases to date have focused not on the trading itself, but on disclosures and practices by those who cater to the firms.
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Both cases center in part on whether the banks misled some clients about how the bank-owned trading venues prioritized certain buy and sell orders, including whether they withheld information that might have led clients to route orders elsewhere. Last January, UBS received a $14.4 million fine in a settlement with the US Securities and Exchange Commission (SEC).
