Barclays Wins Court Cut in Value of UK Investor Dark Pool Trading Suit

Barclays Plc won a bid to cut more than half of the value of a London lawsuit brought by investors over allegations about its dark pool trading system after a judge struck out a series of claims.

More than 100 investors including the New York City Teachers’ Retirement System and Allianz Global Investors Fund jointly sued Barclays in 2020 over the allegations. They argued that the bank concealed “serious underlying misconduct in Barclays’ investment banking division” between 2011 and 2016.

On Friday, a judge dismissed the claims brought by a group of investors — mostly consisting of “passive” tracker funds — that together accounted for about £330 million ($429 million), or over 60% of the total claim. Judge Thomas Leech said that by reducing the scope of the claims, he hoped to boost the chances of a settlement.

The dispute centers on New York state allegations from 2014 that Barclays lied to customers and masked the role of high-frequency trades to boost its dark pool, a private stock market where buy and sell orders are matched within the banks, making the trades anonymous. Barclays ran one of Wall Street’s largest dark pools at the time and paid $70 million to settle the allegations in 2016.

The claims wiped as much as £2 billion from the bank’s market value when they first surfaced.

Lawyers for the investor group said they were likely to appeal, given that the ruling had implications for the type of claims that British tracker funds could pursue.

“In our view it is not appropriate for Barclays to seek to shut out such investors,” they said.

Barclays declined to comment.