Molecule Software Blog

The Molecule Software ETRM/CTRM Blog

Barclays Fires Back

Everyone has seen the news about Barclays 42-page retort to the lawsuit by the NY attorney general. After all the hype of being "the first dark pool suit", the suit is not about predatory front-running trading practices in dark pools. It is really about Barclays allegedly misleading investors claiming their dark pool is safe...umm, although no one is sure Barclays ever said it was safe. What they said is that everyone was allowed into their pool, and that they had the ability to identify who was doing what. Matt Levine writes a great article about this.

The interesting thing for me is not about Barclays anymore. It is that some firms, such as RBC and T. Rowe Price actually did diligence and monitored their trades, so they were able to boost their minimum shares to avoid high speed traders. I think Streetwise Professor got it right - that it is possible to do reasonable due diligence in the dark, and banks should be doing this while the government figures out the legalities.

Is due diligence dead?