Barclays and Credit Suisse have agreed to settle federal and state charges that they violated federal securities laws while operating alternative trading systems known as “dark pools,” with Barclays admitting it broke the law, federal and state officials said Sunday.
Dark pools allow investors to trade large blocks of shares but keep the prices private.
Barclays will pay a penalty of $70 million, split equally between the state of New York and the Securities and Exchange Commission, and it will install an independent monitor to ensure proper operation of its electronic trading division.
Credit Suisse agreed to settle the charges by paying a $30 million penalty to the SEC, a $30 million penalty to the state of New York, and $24.3 million in disgorgement and prejudgment interest to the SEC for a total of $84.3 million. Disgorgement is the repayment of ill-gotten gains that is imposed on wrongdoers by the courts.