As ZeroHedge released a copy of the Barclays PLC (ADR) (NYSE:BCS) (LON:BARC) questionable marketing document and New York Attorney General Eric Schneiderman‘s charges of fraud have been digested, the bank is being shunned by clients, according to several media
Deutsche Bank and Credit Suisse withdrew from participation in the firm’s dark pool
A report in the Financial Times says that Deutsche Bank AG (NYSE:DB) (ETR:DBK) and Credit Suisse Group AG (ADR) (NYSE:CS) were among the institutional players to withdraw from participation in the firm’s dark pool. This comes after Wall Street establishment titans such as Goldman Sachs Group Inc (NYSE:GS), Morgan Stanley (NYSE:MS) and JPMorgan Chase & Co. (NYSE:JPM) had already exited the markets, the Financial Times reported, citing people familiar with the companies. Bloomberg is additionally reporting that Royal Bank of Canada (NYSE:RY) (TSE:RY), Sanford C. Bernstein & Company, Voya Financial Inc (NYSE:VOYA) and Investment Technology Group have stopped sending orders into the Barclays PLC (ADR) (NYSE:BCS) (LON:BARC)’s dark pool.
“Given the news of the NY Attorney General investigation, we are instructing you effective immediately, to not route any of our Voya orders to Barclays LX dark pool or any Barclays venues,” Nanette Buziak, head of trading for Voya Investment Management, told brokers in an e-mail obtained today by Bloomberg News.
Barclays PLC’s shares tumble more than 6%
The past few days have not been positive for dark pool owners, as $13 billion in market cap has been taken away from the 10 largest dark pool owners as speculation swirled as to which dark pool owner would be next on the target list. Shares of Barclays PLC (ADR) (NYSE:BCS) (LON:BARC) tumbled more than six percent as other dark pool operators, such as Credit Suisse, the largest dark pool operator, fell along side UBS AG (NYSE:UBS) and Deutsche Bank AG (NYSE:DB) (ETR:DBK).
Barclays PLC (ADR) (NYSE:BCS) (LON:BARC) dark pool, LX, was hit by technical malfunctions as the disconnections to the firm’s trading venue in New York occurred, Bloomberg is reporting, citing a person with direct knowledge of the matter. The dark pool was said to go down for at least some clients, the person said, but was back up as of 1:30 p.m.
Barclays PLC cooperating with regulators
For its part Barclays PLC is cooperating with regulators and investigating the matter internally, Mark Lane, a Barclays spokesperson said yesterday. “The integrity of the markets is a top priority of Barclays.”
The Barclays PLC (ADR) (NYSE:BCS) (LON:BARC) document in question revealed by ZeroHedge downplays the role high frequency trading firms played in the dark pool. When describing those who trade on the platform, the brochure said: “The following types of clients have access to our internal dark pool, LX: institutional clients, third-party broker-dealers and internal trading desks, including our affiliates’ trading desks.”