Navigation
Suscribe
Menu Search Facebook Twitter
Search Close
Menu ALL SECTIONS
  • Capital Coahuila
  • Capital Hidalgo
  • Capital Jalisco
  • Capital Morelos
  • Capital Oaxaca
  • Capital Puebla
  • Capital Quintana Roo
  • Capital Querétaro
  • Capital Veracruz
  • Capital México
  • Capital Michoacán
  • Capital Mujer
  • Reporte Índigo
  • Estadio Deportes
  • The News
  • Efekto
  • Diario DF
  • Capital Edo. de Méx.
  • Green TV
  • Revista Cambio
Radio Capital
Pirata FM
Capital Máxima
Capital FM
Digital
Prensa
Radio
TV
X
Newsletter
Facebook Twitter
X Welcome! Subscribe to our newsletter and receive news, data, statistical and exclusive promotions for subscribers
Business

Regulators aim at ‘dark-pools’

Untitled-2
2 years ago

Credit Suisse has accepted a $84.3 mln penalty for dark-pool trading. BY RENAE MERLE Bloomberg NEW YORK – The operators of opaque stock trading venues known as “dark pools” are coming under renewed scrutiny from government regulators. New York Attorney General Eric Schneiderman and the Securities and Exchange Commission announced Monday that two of the largest operators of dark pools, Barclays and Credit Suisse, would pay a combined $154.3 million after being accused of lying to customers about their operations. Unlike traditional trading venues such as the New York Stock Exchange or Nasdaq, dark pools mask the identities of those buying or selling stock. For sophisticated traders, including pension funds, that secrecy makes it easier to move large blocks of stock without alerting other traders who could use the information to their advantage. But critics have warned that without proper regulation, the industry could become another avenue for manipulating the financial markets. (About 15 percent of daily U.S. stock-trading volume now occur in dark pools.) In the settlement announced Monday, London-based Barclays is accused of not telling customers that its dark pool included high-frequency traders, who use complex computer algorithms to trade at blink-of-aneye speeds. New York-based Credit Suisse was accused of similar deceptions. Instead of keeping the highspeed traders out as it promised customers, Schneiderman alleged, the companies welcomed them in. His office sued Barclays in 2014 after being alerted to the issue by a whistleblower. Operating in a dark pool, a highfrequency trader could potentially sniff out whether there is a large potential buyer or seller, said Haoxiang Zhu, an assistant professor at the MIT Sloan School of Management, who has studied the venues. “The institutional investors worry about leaking their transaction intentions because this moves prices,” Zhu said. Barclays and Credit Suisse agreed to pay $70 million and $84.3 million in penalties, respectively. Barclays admitted wrongdoing as part of its settlement, but Credit Suisse did not. “We have today have brought some light to the darkest parts of the market,” said Schneiderman, who has made cracking down on predatory Wall Street trading practices a key issue. Both companies said they were satisfied the matter had been resolved. “We are pleased to have resolved these matters with the SEC and the New York Attorney General,” Credit Suisse said in a statement. The fines were the largest ever levied by the SEC against dark pools. Regulators did not pursue charges against any individual employees. The settlements come as another dark pool, Investors Exchange, is fighting to join NYSE and others as a traditional stock exchange. The typically esoteric debate has taken on a higher profile in part because IEX was profiled by Michael Lewis in the book “Flash Boys,” which chronicled the rise of high-frequency trading. IEX supporters say the platform could provide a critical counterweight to venues that favor highfrequency trading, while critics say the dark pool doesn’t meet the standard of a heavily regulated exchange.

Comments Whatsapp Twitter Facebook Share
More From The News
Latest News

Democrat Jones wins stunning red-state A ...

4 days ago
Business

Asian stocks mixed ahead of Fed rate ann ...

4 days ago
Entertainment

NFL Network suspends analysts over sexua ...

4 days ago
Business

Minnesota announces restrictions on usin ...

4 days ago
Most Popular

Energy Secretariat Grants Permissions to ...

By The Associated Press
Business

White House Steps Up Aid for Financially ...

By The Associated Press
Business

Trump Faces Obstacles in Bid to Shake Up ...

By The Associated Press
Business

Brazil's Agnelli, Who Turned Vale Into T ...

By Reuters
Business

Online Lodging Service Airbnb Opens Cuba ...

By The Associated Press
Business