Barclays has been hit with a $150m penalty for allegedly using its foreign exchange electronic trading platform to automatically reject client orders that would have been unprofitable for the bank, and lying to those clients about why their transactions were turned down.
The New York Department of Financial Services also ordered Barclays to fire the global head of electronic fixed income, currencies, and commodities automated flow trading as part of a settlement announced Wednesday, Gina Chon reports in Washington.
The findings are another embarrassment for Barclays, which has already paid the largest fine, $2.4bn in May, out of the multiple Wall Street firms that have been investigated for manipulation of the $5.3tn forex markets.
Wednesday's settlement brings the total Barclays has paid to DFS alone for forex probes to $635m.
The Barclays probe also doesn't bode well for other banks facing similar investigations by DFS for their forex electronic trading platforms, such as Deutsche Bank, BNP Paribas, Credit Suisse, Goldman Sachs and Société Générale.
US regulators have also been increasingly targeting automated and high frequency trading, and the Barclays settlement reflects one of the first major cases involving algorithms for an electronic trading platform.
"We are pleased that Barclays worked with us to resolve this matter," said Anthony Albanese, acting superintendent of DFS. "This case highlights the need for greater oversight and action to help prevent the misuse of automated, electronic trading platforms on Wall Street, which is a wider industry issue that requires serious additional scrutiny."
In a statement, Barclays said it continues to co-operate with other ongoing investigations and to manage related litigation risks as previously disclosed.
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