Looking to deflect a securities class action related to its private “dark pool” trading platform, Barclays plc and its defense team at Sullivan & Cromwell argued that the plaintiffs improperly cribbed their allegations from a pending lawsuit filed by New York’s attorney general. U.S. District Judge Shira Scheindlin in Manhattan found Friday that Barclays’ might have a point, but she still refused to dismiss much of the case.
As Scheindlin put it, plaintiffs lawyers at Pomerantz LLP had borrowed “heavily” from a lawsuit that N.Y. AG Eric Schneiderman filed in June. Both suits allege that Barclays misled investors about safeguards in its Liquidity Cross (LX) dark pool—a platform meant to allow investors to trade stocks with near anonymity. While Barclays asserted publicly that the LX dark pool had built-in protections against aggressive high-frequency traders, it actually operated in a way that gave high-frequency traders an edge, the plaintiffs claim.
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