Barclays PLC (ADR) (NYSE:BCS) (LON:BARC) has removed from day to day operations the senior manager responsible for supervising the firm’s dark pool, the Wall Street Journal is reporting this afternoon.

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Barclays PLC’ Bill White stars in New York Attorney General’s fraud complaint

Bill White headed Barclays Equities Electronic Trading operation and, while not featured by name, was a star in New York Attorney General’s fraud complaint against the firm.

White is being treated “innocent until proven guilty,” but he won’t be involved in electronic trading until the investigation is complete, the Wall Street Journal reported, citing people familiar with the matter.

The fraud complaint makes it clear that White’s division is at the center of the storm and was the focus of the report more than any other division.

“Barclays accomplished (its goal of becoming the top dark pool in the US) through a series of false statements to clients and the investing public about how, and for whose benefit, Barclays PLC operates its dark pool,” the report said.  “Contrary to Barclays’ representations that it implemented special safeguards to protect clients from “aggressive,”  “predatory,” or “toxic” high frequency traders, Barclays has operated its dark pool to favor high frequency traders… and it has given them advantages over others trading in the pool.”

Barclays PLC’s Bank employees refusing to participate in the alleged fraud

The complaint indicates that we could see former Barclays PLC (ADR) (NYSE:BCS) (LON:BARC) Bank employees on the stand, even potentially the individual fired for refusing to participate in the alleged fraud.

“The Attorney General’s investigation has been aided significantly by a number of high-level former Barclays insiders, each of whom was in a position to observe much of the conduct described in this Complaint.”

Perhaps most interesting in the report is White’s apparent firing of a division director who refused to participate in the alleged fraud.  In many brokerage compliance schemes, this likely would have triggered red flags.

“In preparation for a meeting with the Institutional Investor to explain these findings, two senior Directors prepared a PowerPoint presentation that included the results of the trading analysis.  Two days before the scheduled meeting, one of those Directors was called into a meeting with senior leadership in the Equities Electronic Trading division, who instructed him not to disclose the findings to the client.  According to this Director, “[t]here was no suggestion at that meeting, or at any other point, that the analysis was wrong,” merely that it should not be shared with the client because it reflected poorly on Barclays.  Despite the pressure from senior leadership, this Director declined to withhold the findings from Institutional Investor.  The next day, and prior to the scheduled meeting with the Institutional Investor, this Director was fired.

This is perhaps the most damning situation, because firing someone on the ground’s they wouldn’t commit fraud could be a big bank first, if not a first in corporate hiring practices at large.

Here is the text of the entire complaint, provided by Nanex and a PDF version provided by Zerohedge