Friday, June 27, 2014

BCS Barclays Daily Chart Price Collapse New York Regulators Sue Over Dark Pool

Barclays was punished -7.4% on Thursday, 6/26/14, on news that New York regulators sue Barclays for securities fraud concerning its dark pool. Regulators allege that Barclays misleads institutional clients boasting of a level playing field when at the same time preferential treatment is provided to HFT traders. Dark pools are legal and allow trades to occur in anonymity. Large block institutional traders use dark pools when placing trades to not tip off or draw attention to their large positional bets. The serious allegation is that Barclay’s hid from institutional clients and regulators the high-frequency trading data from its largest dark pool trader, the computerized TradeBot, so it did not appear that HFT was rampant and receiving preferential treatment. Regulators further allege that Barclays used false statements to promote the dark pool. Barclays collapses on the news.

BCS peaked last Thursday at 16.44 and dropped to 14.38 a 2-point drop, -12.2%, over the last five days. Ouch. That is going to leave a mark. The bank is selling off for several days before the news since the insider traders were told of the trouble ahead of time and exited the stock leaving the sucka's hold the bag. Nothing changes on Wall Street. Other banks that run dark pools, such as CS, DB and UBS are bludgeoned from -2.4% to -4% lower in Thursday trading. US banks are weak. C is punished -1.2%.

The fallout from Barclays dark pool problem continues into Friday morning. Associated banks and brokers such as DB are beginning to sever connections with the now cancerous bank. Barclays recovers +1% after yesterdays drubbing trying to reverse the five days of selling. The regulators are taking a bite out of the dark pools. The regulators are focused mainly on European banks in recent months which is creating an increasing rift between US and European financial institutions. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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