Barclays will pay a $2 million fine to resolve allegations that it sent client orders to its own trading venue even when customers could have gotten better deals at competing platforms.
The bank's U.S. brokerage unit, Barclays Capital, didn't do reasonable reviews of its execution quality for customer orders sent to its dark-pool trading venue, LX, the Financial Industry Regulatory Authority said Wednesday. The alleged activity occurred from January 2014 to February 2019, Finra said in a news release.
Barclays declined to comment and neither admitted nor denied the allegations as part of the settlement. U.S. brokers are required to seek the best terms reasonably available for customer orders, including checking to see if clients could get better terms for a trade by routing orders differently. Finra and the Securities and Exchange Commission are increasingly focused on whether brokers are offering the best deals to their clients.
Finra is prioritizing "compliance with best execution requirements when handling their customers' orders" as part of its enforcement focus, Jessica Hopper, executive vice president and head of the regulator's enforcement department, said in a statement.
The fine adds to Barclays' regulatory travails after the bank agreed on Sept. 30 to pay $361 million to settle SEC claims that it failed to register securities sales with the markets watchdog. The bank neither admitted nor denied those allegations as well.
