Barclays called for the dismissal on Thursday of a lawsuit from the New York attorney general alleging the bank lied to clients about its high-speed trading venue, calling it unjustified because Barclays' customers were never misled.
The bank's motion to dismiss the lawsuit against its private trading venue—or "dark pool''—was based on procedural and case law grounds.
The bank said Attorney General Eric Schneiderman did not have the authority to accuse the bank of fraud and deceit under New York's Martin Act, which aims to protect investors when the purchase, sale or exchange of a security is misrepresented.
The motion said that fundamentally the New York attorney general failed to identify any fraud, and did not establish material misstatements, identify victims or actual harm.
Barclays said that its clients were highly sophisticated traders and money managers who are capable of closely monitoring the quality of their trades, not glossy marketing brochures or quotes from magazine articles the attorney general cites.
Barclays also said sales materials the bank showed clients were misconstrued by the attorney general's office, in one case making one document appear as if it were two. Seen as one document, Barclays argued a sophisticated investor would fully understand the intricacies of trading on its high-frequency venue known as LX.