Dark Pools Pervade Wall Street

11 | By Shah Gilani

I’m not usually the kind of guy to say, “I told you so.”

But you know what? I’m saying it.

I told you so.

Dark pools – private markets unavailable to the public – and high-frequency trading are manipulative schemes run amok.

They weren’t always. Both were the result of unintended consequences. But that’s all behind them. In front of them now are civil and criminal lawsuits.

Late yesterday, New York State Attorney General Eric Schneiderman charged Barclays PLC with fraud over how it markets its dark pool and how it operates it.

In a press conference yesterday after the market had closed, the AG said, “Barclays dramatically increased the market share of its dark pool through a series of false statements to clients and investors about how and for whose benefit Barclays operates its dark pool. Contrary to Barclays representations that it implemented special safeguards to protect clients from aggressive or predatory high frequency traders, Barclays is accused of operating its dark pool to favor high frequency traders.”

But that’s not all Barclays did. Keep reading, and I’ll explain all…

3 D.C. Scandals Converge to Set New Standards for Outrageousness

17 | By Shah Gilani

Here are three not-so-little things hitting my radar this morning.

On Thursday, you were all shocked (not) to have to consider the possibility that peeps in Congress would ever break a law, let alone a law they made to stop themselves from breaking laws.

Alas, it may have happened. I say “may,” because we may never know if the perps – um, I mean, peeps in Congress are still making money by dishing out dirt on legislation they’re brewing up, this time to traders who profited from leaky pipes in the Senate or House.

While I like to beat on the executive branch for their various foibles, this time I admire their moxie for trying to make a case here.

I’m going to tell you what the feds and the courts are trying to do here. I expect a full-on separation-of-powers battle royale.

Here’s how it could go down …