A New York judge on Friday rejected Barclays Plc’s effort to dismiss state Attorney General Eric Schneiderman’s lawsuit accusing it of defrauding clients about high-speed trading in its private “dark pool” trading platform.
Justice Shirley Werner Kornreich of the State Supreme Court in Manhattan said it was premature to dismiss Schneiderman’s claim under the state’s Martin Act, a powerful anti-fraud law.
“Traders are entitled to rely on material representations banks make about their dark pools,” the judge wrote. “If such representations are untrue, the integrity of dark pools will be compromised and investor confidence in them will be shaken.”
But the judge said Schneiderman still must show enough specifics about Barclays’ dark pool to demonstrate the bank lied to clients and investors.