Swiss bank could be fined hundreds of millions of dollars for 'dark pooling'

folarin okunola

August 13, 2015 4:14 PM

The case against Credit Suisse includes allegations that it aided unfair advantages for some traders, didn't follow rules against stocks pricing and was unable to properly disclose how Crossfinder works to investors.

The company's logo outside it's headquarters in Switzerland

Media reports reveal Credit Suisse Group AG is in talks to settle allegations related to its Crossfinder "dark pool" trading venue, which may result in a fine running in the high tens of millions of dollars.

Dark pools are broker-run trading venues that let investors trade shares anonymously and only make trading data available after trading has been completed, thereby reducing the chance of information leaking about trade orders.

The WSJ said the case against Credit Suisse includes allegations that it aided unfair advantages for some traders, didn't follow rules against stocks pricing and was unable to properly disclose how Crossfinder works to investors.

Business Insider reports that the bank is in negotiations with the New York Attorney General and the Securities and Exchange Commission and a deal could come as early as the next several weeks.

The WSJ reports that representatives at Credit Suisse, the SEC and the New York Attorney General's office were not immediately available for comment.

The settlement under negotiations has the potential to be the biggest fine ever levied against an operator of a private trading venue according to the WSJ.

Dark pools were designed to let people trade shares quietly before investors in the larger market could learn about and bet against their trades.

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