Allegations of fraud made against Barclays - UPDATE

Shares in banking group Barclays plunged on Thursday after a lawsuit was filed by the New York State Attorney General against the group's "dark pool" trading division. The complaint was made specifically in relation to its alternative trading system LX Liquidity Cross following an investigation by Attorney General Eric Schneiderman and alleges that it carried out fraud and "deceptive practices". The lawsuit is seeking unspecified monetary damages and injunctive relief, Barclays said in a brief statement. "Barclays will update the market, if appropriate, in due course," the bank said.Will Hedden, Premium Client Manager at IG, said the complaint marked "another chapter in the story of US lawmakers versus high frequency trading", noting that more cynical commentators would likely seeing it as further evidence of a "continued assault" on European investment banks. He continued: "Allegations of fraud within dark pools are once again doing nothing to help the reputation of the nuts and bolts of 21st century equity markets. One of the key points to make here is that this is a lawsuit, and no number is even mentioned as to what this could cost Barclays. "No surprises that this once again gives investors the dilemma of whether to look at banking valuations for the long term, or steer clear and look for opportunities in sectors with less of a bull market hangover."LX Liquidity provides alternative liquidity to market participants.NR