Barclays and Credit Suisse are poised to settle federal and state charges that they misled investors in their dark pools, with Barclays admitting it broke the law and agreeing to pay $70 million, the New York attorney general's office said Sunday.
The settlements between the banks and the U.S. Securities and Exchange Commission and the New York attorney general, which are expected to be formally announced on Monday, will mark the two largest fines ever paid in connection with cases involving dark pools.
At the heart of the cases against both Barclays and Credit Suisse are allegations that they misled investors in the dark pools, saying they would be protected from predatory high-frequency trading tactics.
Altogether, the banks are expected to pay a combined total of $154.3 million.
Of that, Barclays will pay a $70 million fine split evenly between the SEC and New York state, admit it violated securities laws and agree to install an independent monitor to ensure that its dark pool "Barclays LX" operates properly in the future.
Credit Suisse will pay a $60 million fine split between the regulators, plus an additional $24.3 million in disgorgement to the SEC for executing 117 illegal sub-penny orders out of its dark pool known as "Crossfinder."
As part of the settlement, Credit Suisse will neither admit nor deny the allegations.