* Bank says lawsuit fails to identify any fraud
* No victims, harm or material misstatements established -Barclays (Adds Schneiderman statement, paragraph 5, additional bylineand dateline)
By Herbert Lash and Steve Slater
NEW YORK/LONDON, July 24 (Reuters) - Barclays Plc urged the dismissal on Thursday of a lawsuit from the New Yorkattorney general alleging the bank lied to clients about itshigh-speed trading venue, saying the complaint had "fatal flaws"because Barclays' customers were never misled.
The bank's motion to dismiss the lawsuit against its privatetrading venue - or "dark pool" - said the attorney generalfailed to identify any fraud, and did not establish materialmisstatements, identify victims or actual harm.
Barclays said the lawsuit filed by Attorney General EricSchneiderman had clear and substantial errors. Should litigationproceed, the bank said it would show how baseless theallegations are.
"The very marketing documents and e-mails from which thecomplaint selectively quotes, along with the complaint's otherfatal flaws, are sufficient to require dismissal of this 'fraud'action," the motion said.
In a statement from a spokesman, Schneiderman stood hisground, saying the lawsuit detailed how Barclays engaged in "apersistent pattern of fraud and deceit, lying to its investorsin order to grow its dark pool."
Barclays said Schneiderman lacked the authority to accusethe bank of wrongdoing under New York's Martin Act, which aimsto protect investors when the purchase, sale or exchange of asecurity is misrepresented.
Barclays' clients are highly sophisticated traders and moneymanagers who are capable of closely monitoring the quality oftheir trades based on execution data, not glossy marketingbrochures or quotes from magazine articles, the bank said.
The allegations are premised on mischaracterizations ofdocuments portrayed in the complaint in a way that removes important information and context Barclays provided about highfrequency traders and "aggressive" trading, the bank added.
It said sales materials the bank showed clients weremisconstrued, in one case making one document appear as if itwere two. Seen as one document, Barclays argued a sophisticatedinvestor would fully understand the intricacies of trading onits high-frequency venue known as LX.
Barclays said in a statement that it works closely withregulators in all jurisdictions and will continue to cooperatewith the New York attorney general.
"However, we do not believe that this suit is justified, andwe have a duty to our shareholders, clients and staff to defendour position," the bank said.
Schneiderman's fraud claims could hang over Barclays wellinto next year, as it typically takes at least six months for adecision to be made on whether to dismiss a complaint or proceedto trial.
The attorney general's lawsuit against Barclays was filed onJune 25. It accuses the bank of giving high-frequency traders,using advanced computer systems and algorithms to tradesecurities in milliseconds, an unfair advantage over investors.
The lawsuit marks the highest profile case yet stemming fromscrutiny of high-frequency trading by U.S. authorities. Tradingactivity in Barclays' dark pool slumped by more thanthree-quarters in the two weeks after the lawsuit, and itsshares are down 7 percent since the complaint was filed. (Additional reporting by Karen Freifeld in New York, reportingby Herbert Lash; Editing by Chizu Nomiyama and Tom Brown)
Barclays (BARC)
